The move represents an unprecedented escalation in President Donald Trump’s battle with the Fed, an independent agency he has repeatedly attacked for not cutting its key interest rate as sharply as he prefers. The renewed fight will likely rattle financial markets Monday and could, over time, escalate borrowing costs for mortgages and other loans.
The subpoenas relate to Powell’s testimony before the Senate Banking Committee in June, the Fed chair said, regarding the Fed’s $2.5 billion renovation of two office buildings, a project that Trump has criticized as excessive.
Powell issued a video statement in which he bluntly characterized the threat of criminal charges as simple “pretexts” to undermine the Fed’s independence when it comes to setting interest rates.
In a brief interview with NBC News Sunday, Trump insisted he didn’t know about the investigation into Powell. When asked if the investigation is intended to pressure Powell on rates, Trump said, “No. I wouldn’t even think of doing it that way.”
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