Federal Reserve Chairman Jerome Powell confirmed that the central bank has been served by the Justice Department on allegations related to testimony in Congress about the renovation of the bank’s headquarters. (Credit: Federal Reserve)
U.S. Attorney for the District of Columbia Jeanine Pirro said Monday that the Federal Reserve has repeatedly failed to respond to her office’s reporting of alleged cost overruns and Chairman Jerome Powell’s testimony in Congress: urging prosecutors to initiate a legal process that she says is “not a threat.”
“The word ‘indictment’ came from Mr. Powell’s mouth, not anyone else’s. None of this would have happened if they had just responded to our outreach,” Pirro said.
“This agency makes decisions based on the merits, nothing more, nothing less. We agree with the Chairman of the Federal Reserve that no one is above the law, and that is why we expect his full cooperation.”
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Federal Reserve Chairman Jerome Powell arrives at the U.S. Federal Reserve in Washington on January 13, 2026. (Nathan Howard/Reuters/Reuters)
In a video statement released Sunday, Powell said the Justice Department served the Federal Reserve with grand jury subpoenas on Friday, describing the measure as a threat to the U.S. central bank. criminal charges related to his testimony in June before the Senate Banking Committee.
The testimony focused in part on a multi-year, $2.5 billion project to renovate two of them Federal Reserve office buildings: the Marriner S. Eccles Federal Reserve Board Building and the 1951 Constitution Avenue Building.
Powell said the Justice Department’s “new threat” was a “pretext” that had nothing to do with his Senate testimony or the renovation project.
“The threat of criminal prosecution is a result of the Federal Reserve setting interest rates based on our best estimate of what will benefit the public, rather than following the president’s preferences,” he said. “This is about whether the Fed will be able to continue setting interest rates based on evidence and economic conditions – or whether monetary policy will instead be driven by political pressure or intimidation.”
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A worker enters the construction site of the Federal Reserve headquarters in Washington, DC on January 12, 2026. (Kevin Lamarque/Reuters/Reuters)
Powell has rejected repeated calls from the president Donald Trump to cut rates more aggressively, although the Federal Reserve cut rates three times in late 2025.
Rep. Anna Paulina Luna, R-Fla., referred Powell to the Justice Department in July, claiming in a letter to the attorney general Pam Bondithat he misrepresented the scope and features of the Federal Reserve’s renovation project and made false statements to officials about its escalating price tag.
She said the renovation costs were $700 million over budget.
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The Federal Reserve said on its website that the cost increases were caused by design changes after consultation with rating agencies, higher-than-expected material and labor costs and unforeseen circumstances such as additional asbestos and toxic soil contamination.
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Several Republican lawmakersincluding Sens. Thom Tillis of North Carolina and Lisa Murkowski of Alaska questioned the Justice Department’s motive for issuing grand jury subpoenas the Federal Reserve, raising concerns that the action could undermine the central bank’s independence.
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“If there were any doubt that advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should be no more now. It is now the independence and credibility of the Department of Justice that are at stake,” Tillis said.
He added that he would oppose the confirmation of any Fed nominee, including the upcoming vacancy for a Federal Reserve chairman, until the legal issue is “fully resolved.”
