Former Fed Chairs and Treasury Secretaries Rally to Defend Jerome Powell Amid DOJ Criminal Probe
A bipartisan group of former Fed chairs and Treasury secretaries issued a joint defense of Fed Chair Jerome Powell after he confirmed a DOJ probe into a $2.5 billion Fed headquarters renovation, saying the inquiry threatens central bank independence.
- Rare bipartisan push: Former Fed and Treasury leaders called the probe an unprecedented attempt to undermine Fed independence.
- Probe details: DOJ inquiry centers on Powell’s Senate testimony about a $2.5 billion renovation; no charges have been filed.
- Political fallout: The investigation prompted bipartisan concern on Capitol Hill and raised questions about prosecutorial scope.
- Local impact: Inland Empire residents and businesses could feel effects via changes in interest-rate expectations, lending and housing markets.
What happened and why it matters
A coalition of former Federal Reserve chairs and former Treasury Secretaries issued a joint statement this week defending Fed Chair Jerome Powell after he confirmed a Department of Justice criminal inquiry related to a $2.5 billion renovation of Federal Reserve headquarters. Signers warned the probe risks politicizing monetary policy and chilling future central bankers.
What the joint statement says and who signed it
The statement—described in reporting as a rare bipartisan rebuke—called the DOJ action “an unprecedented attempt to use prosecutorial attacks to undermine [Fed] independence.” The signers included former Fed chairs Alan Greenspan, Ben Bernanke and Janet Yellen, former Treasury Secretaries Timothy Geithner and Henry Paulson, plus several former chairs of the Council of Economic Advisers. Multiple outlets reported the quoted language and the signers. (Source: ABC News.)
Powell’s response and the nature of the probe
On Jan. 11, 2026, Powell confirmed the existence of the DOJ probe in a video statement posted by the Federal Reserve, saying it relates to his Senate testimony about the renovation and denying any wrongdoing. He framed the inquiry as a threat to the Fed’s ability to set policy “based on evidence and economic conditions” rather than political pressure. (Source: Federal Reserve; ABC News.)
Prosecutors are examining whether Powell made false statements under oath about design features originally proposed for the renovation—items cited in reporting include a rooftop terrace, water features, private elevators and dining rooms. The Fed says those features were part of a 2021 proposal and later dropped, and that cost overruns stemmed from unforeseen increases while the consolidation is expected to yield long-term savings. (Source: ABC News.)
How the inquiry began
The inquiry followed a July 2025 criminal referral by Rep. Anna Paulina Luna (R-Fla.), who alleged Powell misled Congress about cost and design changes. The probe was also set against public scrutiny after President Trump toured the renovation site with Powell, resulting in widely circulated photos of both men wearing white hard hats. The White House has stated the president supports Fed independence while defending his right to criticize the chair. (Sources: ABC News; ABC News (business).)
Capitol Hill reaction and political fallout
The probe prompted an unusual bipartisan backlash. Several Republicans warned that prosecuting a Fed chair over testimony would undermine central bank independence—Senators such as Thom Tillis (R-N.C.) and Lisa Murkowski (R-Alaska) voiced concerns and threats of oversight or confirmation delays. Senate Majority Leader John Thune (R-S.D.) said serious evidence must justify such a probe. Democrats, including Sen. Elizabeth Warren (D-Mass.), accused the administration of weaponizing the Justice Department. (Source: Fox Business.)
Legal and timing notes
Powell’s term as Fed chair ends in May 2026, though he remains a Board of Governors member until 2028. As of this report, no charges have been filed and the inquiry is ongoing. The criminal inquiry is led in Washington, D.C., by U.S. Attorney Jeanine Pirro under Attorney General Pam Bondi. Officials say normal processes are underway and no additional public details have been released. (Sources: ABC News; ABC News (business).)
Why former Fed and Treasury officials are speaking out
Signers emphasized structural, not personal, concerns: independent central banking has helped stabilize the U.S. economy and central bankers must be free to set interest rates without fear of criminal investigation for testimony about official duties. They warned that prosecutorial steps against a sitting Fed chair could chill future officials and erode the system. (Source: ABC News.)
Open questions for watchdogs and the public
- Did Powell knowingly mislead Congress? If so, does that rise to a criminal level?
- Are prosecutors acting within normal bounds or entering political territory?
- How will the probe affect Fed decision-making, markets and public trust?
Implications for the Inland Empire
The Inland Empire’s economy is linked to national interest-rate policy through housing, borrowing and investment. A probe that pressures the Fed to alter policy for political reasons could affect mortgage rates, consumer loans and business credit in Riverside and San Bernardino counties. Short-term rate changes might ease payments for some homeowners, but a politicized shift could create market uncertainty harmful to developers and firms reliant on steady financing.
Local lending and housing: the region’s strong housing and logistics growth makes it sensitive to rate volatility—sudden changes could complicate home-buying, refinancing and project financing for builders and small lenders.
Business and jobs: many Inland Empire businesses depend on stable credit to expand. Disruption in monetary policy could slow hiring in warehousing, manufacturing and construction. Conversely, politically driven cuts risk future inflation or instability.
Political and civic trust: the episode could deepen local debate over federal power and prosecutorial use. Residents and local officials may seek clear explanations and oversight to preserve institutional trust.
Practical effects for residents: changes in interest-rate expectations influence car loans, credit cards and small-business borrowing. Households planning purchases or refinancing should seek guidance from local financial counselors and banks.
Source notes and full links
- ABC News: DOJ’s criminal probe into Fed chair Powell.
- ABC News (business): Former Fed officials defend Powell.
- Federal Reserve: Powell video statement, Jan. 11, 2026.
- Fox Business: Coverage of Capitol Hill reaction.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”
—Jerome Powell, Federal Reserve video statement, Jan. 11, 2026
