WASHINGTON — The US Justice Department has opened a criminal investigation into Federal Reserve Chairman Jerome Powell over his testimony before a Senate panel about renovations to the central bank headquarters in Washington.

In a video statement posted Sunday night, Powell called the investigation "unprecedented" and said he believed it was a direct result from his ongoing struggle with the administration over interest rates. It was a consequence of broader “threats and ongoing pressure” by the administration, he said.

"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," Powell said.

"I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chair of the Federal Reserve is above the law, but this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure," he went on to say.

The probe, which prosecutors have not confirmed, would signal a fresh escalation in Trump's ongoing dispute with Powell, who the president nominated for the role as Fed chair in 2017.

Trump has repeatedly threatened to remove Powell, who he has criticized for not cutting interest rates as quickly as the president would have liked. In the second half of 2025, the Fed cut interest rates three times.

The president has consistently blamed his predecessor, Joe Biden, and interest rates for inflation and costs in the US.

Critics have raised concerns that Trump's pressure to oust the Fed chair would muddy the institution's authority to set interest rates independently from presidents.

North Carolina Senator Thom Tillis, a Republican who is a member of the Senate Banking Committee, said he would oppose the nomination of Powell's replacement by Trump, and any other Fed Board nominee, "until this legal matter is fully resolved".

"If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none," Tillis said in a statement.

"It is now the independence and credibility of the Department of Justice that are in question," the senator said.

Senator Elizabeth Warren, a Democrat, said she believed Trump's plan was to push Powell off the Fed board for good and "install another sock puppet to complete his corrupt takeover of America's central bank".

Powell's investigation will be overseen by the US Attorney's Office for the District of Columbia, according to the New York Times, which first reported the probe.

Justice Department spokesperson Chad Gilmartin declined to comment on the investigation but said in a statement to CNN that the attorney general wants to “prioritize investigating any abuse of tax payer dollars.”

The White House referred CNN to the DOJ statement. In an interview with NBC News on Sunday, Trump denied knowledge of the investigation, saying, “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings.” — Agencies