DOJ Launched Baseless Investigation of Fed Chairman Powell For Resisting Rate Cuts Sought by Trump

NEWS & RESEARCH

The Department of Justice launched a criminal investigation into then-Federal Reserve Chair Jerome Powell, claiming he misled Congress regarding the cost of renovations to the Fed’s DC headquarters. Denying the US Attorney’s request for subpoenas, a federal judge ruled in March 2026 that the government hadn’t provided evidence of wrongdoing to counter the appearance that President Trump sought to pressure Powell to cut interest rates. DOJ has since dropped the case.

SOURCES: The Guardian

ANALYSIS & OPINION

DOJ’s prosecution of Powell constituted a significant escalation in the Trump administration’s campaign against the Fed, which has also included efforts to remove Lisa Cook and install loyalists on the board. Trump’s attacks threaten the central bank’s political independence, risking market and public confidence.

SOURCES: Washington Post editorial | AP

HOW TO FIX IT

Federal action:

• Pass the Prohibiting Political Prosecutions Act of 2026, which prohibits government attorneys from being influenced by the political association, activities, or beliefs of a person in determining whether to take legal action against the person.

• The Senate should not confirm any Fed nominees who has not demonstrated the backbone to resist presidential pressure

• Congress should hold hearings to ensure that the president is not unduly pressuring the Fed

Legislation: S.3874 - Prohibiting Political Prosecutions Act of 2026