Powell's statement refutes the accusations: Undeterred by political pressure, he is determined to fulfill his responsibilities.

Source: Federal Reserve website, compiled by Jinse Finance

This morning, The New York Times reported that U.S. federal prosecutors have launched an investigation into Federal Reserve Chairman Jerome Powell regarding the renovation of the Federal Reserve headquarters. Powell subsequently issued a statement saying that the U.S. Department of Justice threatened on Friday to file criminal charges against him for his Senate testimony last June, which concerned years of renovations to the building. The grand jury subpoena was served last Friday. The new threat is unrelated to his testimony or the renovation project; it's just a pretext. The broader question is whether the Federal Reserve will continue to set interest rates based on evidence and economic data, or will be swayed by political pressure and intimidation. Powell stated that **in fulfilling his duties, he should neither fear political pressure nor favor any political stance**, and will continue to do so. He also expressed deep respect for the rule of law, but noted that **this action is unprecedented** and should be examined within the context of the current administration's continued pressure on the Federal Reserve. Market reactions to the investigation of Powell were mixed. Republican Senator Tillis stated that no nominee for the Federal Reserve, including chairman, would be confirmed until Powell's legal case is resolved. Allianz's chief economic advisor, Mohamed El-Erian, commented that **the current situation may expose deeper problems and further erode the Federal Reserve's already fragile public credibility**. What is urgently needed now is for the successor to be committed to implementing necessary reforms to restore the effective operation of the world's most influential central bank. The following is the full text of Powell's statement: Last Friday, the Department of Justice issued a grand jury subpoena to the Federal Reserve, threatening criminal charges against me for my testimony before the Senate Banking Committee last June. That testimony was partly related to a years-long renovation project of a historic Federal Reserve building. I deeply respect the rule of law and accountability in a democratic system. No one—including the Federal Reserve Chairman—is above the law. But this unprecedented action should be viewed in the broader context of threats and continued pressure from this administration. This new threat is not directed at my testimony last June, nor at the renovation of the Federal Reserve building. It is also unrelated to Congress's oversight function; the Federal Reserve has made every effort, through testimony and other public disclosures, to keep Congress informed of the progress of the renovation project. These are all pretexts. The threat of this criminal charge stems from the Federal Reserve's setting of interest rates based on the best assessment of the public interest, rather than simply catering to the president's preferences. This concerns whether the Fed can continue to set interest rates based on evidence and economic conditions, or whether monetary policy will be swayed by political pressure or intimidation. I have served four administrations on the Federal Reserve Board, under both Republican and Democratic administrations. In each administration, I have upheld the principles of impartiality and incorruptibility, resisting political pressure, remaining unbiased, and focused on achieving price stability and full employment. Public service sometimes requires unwavering commitment in the face of threats. I will continue to uphold integrity, dedicate myself to serving the American people, and fulfill the responsibilities I have been confirmed by the Senate. Thank you.