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Federal Reserve Chair Jerome Powell says the Department of Justice served the central bank with grand jury subpoenas on Friday, threatening criminal charges over his congressional testimony last June about office renovations. Powell claims the renovation issue is just a cover story for the administration pressuring the Fed over interest rate decisions.
What's the scoop?
- What Powell Said: Back in June, Powell answered congressional questions about the renovation, pushing back on claims the project included over-the-top features like new marble, fancy elevators, or rooftop gardens. He pointed to the Fed's ongoing efforts to keep Congress in the loop through testimony and public disclosures.
- The Renovation Backstory: The Fed's headquarters renovation has ballooned from its original estimate to ~$2.5B, drawing criticism from administration officials over cost overruns and project scope.
- Powell's Read on the Situation: Powell called the subpoenas unprecedented. He believes this has nothing to do with building renovations. Rather, it’s about the Fed setting interest rates based on economic data rather than what the president wants. He framed it as an intimidation tactic aimed at influencing monetary policy.
- Part of a Bigger Pattern: The move follows months of administration criticism over the Fed's rate decisions, plus earlier scrutiny of the renovation project — including referrals to the DOJ alleging Powell lied under oath during his testimony.
