Investigation Launched Over Senate Testimony and Renovations Jerome Powell disclosed that the Justice Department served subpoenas to the Federal Reserve and threatened a criminal indictment tied to his June Senate testimony about costly building renovations, a move he called unprecedented [1][3]. He insisted the probe’s real motive is to pressure the Fed’s policy decisions, not the testimony or construction work [1][2]. Multiple outlets report the investigation is framed as a political retaliation for the Fed’s recent interest‑rate stance [1][2][3].

Former Fed Leaders Decry Threat to Central Bank Autonomy coalition of former chairs—including Janet Yellen, Ben Bernanke and Alan Greenspan—publicly condemned the DOJ inquiry, warning it could erode the Fed’s independence and destabilize inflation management [2][1]. Yellen described the action as “extremely chilling” and likened unchecked presidential meddling to a “banana‑republic” scenario [2][1]. The signatories stressed that the rule of law underpins the U.S. financial system and that politicizing the central bank risks broader economic fallout [2][3].

President Trump Denies Involvement While Attacking Powell In separate interviews, Donald Trump asserted he had no knowledge of the investigation and dismissed any role in its initiation [1][3]. He simultaneously labeled Powell a “major loser” and a “numbskull,” intensifying public criticism of the chair [2][1]. The White House and Justice Department offered no comment, leaving the political dispute unresolved [2][1].

Congressional Pushback Centers on Blocking Powell’s Successor Republican lawmakers such as Sen. Thom Tillis pledged to oppose any Trump‑nominated replacement for Powell until the probe is resolved [2][1]. Other members of both parties echoed concerns that the investigation distracts from core policy work and could be used to install a more compliant chair [3][1]. The looming May end of Powell’s term adds urgency to the Senate’s deliberations over the next appointment [1][3].

Markets Remain Steady Amid Speculation on Credit‑Card Rate Cap Initial trading showed the S&P 500 near flat, with financial stocks slipping modestly as investors weighed the potential impact of the probe [2]. Analysts highlighted a concurrent report on a possible 10 percent cap on credit‑card interest rates, adding another layer of uncertainty [2]. Despite the political turbulence, market participants described the response as muted but watchful [2].