US federal prosecutors have opened an investigation into Federal Reserve Chair Jerome Powell over the renovation of the central bank's Washington headquarters.
The probe is being conducted by the US Attorney's Office for the District of Columbia. Investigators are examining whether Powell misled Congress about the scope and total cost of the renovation project. Prosecutors are reviewing the Fed chair’s public statements as well as documents related to project expenditures.
The inquiry adds another layer of pressure on Powell amid strained relations with the administration of President Donald Trump. The US leader has repeatedly criticized the Fed chief for refusing to pursue deeper interest rate cuts and has publicly raised questions about possible irregularities in the central bank's building renovation, allegations that Powell has denied.
In 2025, the Federal Reserve lowered interest rates by a total of 75 basis points, far less easing than Trump had sought. Powell defended his cautious approach, citing lingering inflation risks and uncertainty related to the administration's economic policies.
Trump is expected to accelerate an announcement on replacing Powell as Fed chair. Notably, Powell's term is set to expire in May. According to the president, he has settled on a candidate and intends to make his decision public soon.
Leading candidates to become the next Fed chief include White House economic adviser Kevin Hassett and former Fed Governor Kevin Warsh. Both support Trump’s call for more aggressive rate cuts.
