Federal Reserve Chairman Jerome Powell revealed on Sunday that he is the subject of a criminal investigation launched by federal prosecutors.

In a recorded statement, Powell explained that the U.S. Department of Justice had served subpoenas to the Federal Reserve and warned him of potential criminal charges related to his testimony before the Senate concerning renovations of Fed buildings.

Powell described the investigation as extraordinary and suggested it stemmed from his refusal to lower interest rates, a move former President Donald Trump had repeatedly demanded.

Powell becomes another prominent figure who, after falling out of favor with Trump, faces scrutiny from federal prosecutors.

The Justice Department and the White House have not yet publicly responded to requests for comment.

"This issue is about whether the Federal Reserve can continue to make monetary policy decisions based on data and analysis, or if such choices will be controlled by political interference," Powell stated.

He emphasized his commitment to democratic values and the rule of law, while also warning that the action should be seen in light of increased political pressure from the Trump administration.

Speaking in an interview with NBC News, Trump said he had no knowledge of the investigation, but took the opportunity to criticize Powell’s leadership and project oversight.

The Federal Reserve is currently undergoing major refurbishments of its Eccles Building and offices on Constitution Avenue, the first such effort since they were constructed in the 1930s.

The modernization project includes removing hazardous materials like asbestos and lead to improve safety conditions.

The Fed claims the updates will bring long-term savings, but Trump has strongly criticized the rising costs, which have reportedly reached $3.1 billion, exceeding initial estimates by $600 million.

The investigation, though not confirmed by prosecutors, marks a significant development in the long-standing friction between Powell and Trump, who nominated Powell to the Fed chair in 2017.

The announcement also comes as Trump prepares to name a new Federal Reserve leader by the end of the month.

Throughout his presidency, Trump expressed frustration with Powell for not aggressively cutting interest rates. In the latter half of 2025, the Fed did lower rates three times.

Inflation and interest rates have remained hot-button issues, with Trump blaming economic woes on these factors and on his predecessor, Joe Biden.

Some observers worry that attempts to remove Powell could compromise the Federal Reserve’s authority to conduct monetary policy free of political influence.

Republican Senator Thom Tillis of North Carolina, who sits on the Senate Banking Committee, stated he would oppose any nominee for the Federal Reserve Board until Powell’s legal situation is settled.

"If anyone still had doubts that the Trump administration aims to influence the Federal Reserve, those doubts should be gone now," Tillis said.

"This raises serious questions about the independence and integrity of the Justice Department," he added.

Democratic Senator Elizabeth Warren strongly criticized Trump, claiming he aimed to replace Powell with a loyalist to bring the central bank under his influence.

"The Senate should not confirm any of Trump's picks for the Federal Reserve until these matters are fully addressed," Warren stated.

The New York Times reported that the investigation is being handled by the U.S. Attorney’s Office in Washington, D.C.

April Larusse, an investment expert at Insight Investment, commented to the BBC that the Fed has been active on interest rate policy, and the criticism appears to be politically charged.

She said Trump’s push for lower rates likely aims to stimulate broader economic benefits, especially for lower-income households still facing hardship from inflation and stagnant wages.

Reports of Powell’s investigation, along with tensions escalating in Iran, led to increased demand for precious metals.

Gold prices rose by 1.4% on Monday to $4,572.36 per ounce, briefly hitting a new peak of $4,600.33.

Silver also reached an all-time high of $84.58 per ounce before retreating slightly to $83.26, marking a 5.4% gain for the day.

Trump had previously tried to remove Fed Governor Lisa Cook over alleged mortgage-related misconduct.

That attempt was blocked in federal court and is now scheduled to be reviewed by the Supreme Court later this month.

Other politically charged cases under Trump’s Justice Department, such as those against former FBI director James Comey and New York Attorney General Letitia James, were also dismissed by courts.

Comey, who led the 2016 probe into Russian election meddling, was fired during Trump’s first term. Both he and James have denied any wrongdoing and consider the cases to be politically driven.