House Speaker Mike Johnson has declined to take a position on reports that the Department of Justice (DOJ) is pursuing criminal charges against Federal Reserve Chairman Jerome Powell, urging the public to "reserve judgment" until an investigation concludes.
A Call for Caution Amidst Political Storm
During his weekly press conference on Tuesday 13 January 2026, Johnson was asked by The Independent whether financial markets could still trust the Federal Reserve's independence given the alleged probe. The Speaker carefully distanced the institution from its leader in his response.
"Chairman Powell is an individual, he is not the Fed," Johnson stated. "He's the chair of the Fed." He emphasised that if credible allegations exist that someone has lied to Congress, a DOJ investigation is warranted for anyone, implying no one should be immune.
"If he's innocent, as he says, then that will come out in the investigation, and all of us need to reserve judgment and wait for that to happen," Johnson added, recommending that the press and public adopt the same cautious approach.
Roots of the Alleged Investigation
The potential charges are said to be connected to testimony Powell gave to Congress last year concerning renovations to the Federal Reserve's offices. Former President Donald Trump and Republican lawmakers have consistently criticised the project for exceeding its budget and for its supposedly lavish fittings.
However, in a video statement released on Sunday evening, Chairman Powell presented a starkly different narrative. He claimed the threat of prosecution stems directly from his refusal to acquiesce to Trump's demands to cut interest rates. This touches a core principle of modern central banking: the attempt to remain operationally independent and apolitical.
Trump, who originally nominated Powell to the role in 2017 and saw him renominated by President Joe Biden, has repeatedly lambasted the Fed Chair for being too slow to lower rates. Despite implementing three rate cuts, Powell initially showed caution, partly in response to Trump's "Liberation Day" tariffs. Trump has publicly labelled Powell "too late" and "a stupid person."
Market Context and Institutional Future
The political furore erupted on the same day the Bureau of Labor Statistics released its key Consumer Price Index report. The data showed inflation rose 0.3 percent in December and 2.7 percent over the past 12 months. Core CPI, which excludes volatile food and energy prices, increased by 2.6 percent.
When pressed further, Speaker Johnson indicated he would not comment extensively for now, noting the imminent leadership change at the central bank. "There will be a new chairman come May, and you know, we'll go forward," he said, reinforcing his stance to withhold judgment.
This unfolding situation places the longstanding tradition of Federal Reserve independence under unprecedented strain, raising significant questions about the intersection of political pressure, judicial action, and economic stewardship.
