Former Federal Reserve Leaders Condemn Criminal Probe Into Jerome Powell

Three former heads of the United States central bank have strongly criticised a criminal investigation into Federal Reserve Chair Jerome Powell, warning that the move threatens the independence of one of the country’s most important institutions.

In a rare joint statement, former Fed chairs Janet Yellen, Ben Bernanke and Alan Greenspan, joined by 10 other senior economic policy figures, rallied behind Powell and described the Justice Department’s action as deeply troubling.

“This is how monetary policy is conducted in countries with weak institutions, often with damaging consequences for inflation and economic stability,” the former officials said. “It has no place in the United States, where the rule of law is the foundation of economic success.”

The investigation follows months of escalating criticism of Powell by President Donald Trump, who has repeatedly attacked the Fed chair over interest-rate decisions and questioned his leadership in unusually personal terms.

Powell revealed the existence of the probe in an unscheduled public statement, saying the Justice Department had raised the possibility of criminal charges linked to testimony he gave to a Senate committee last year about renovations at Federal Reserve buildings.

He called the investigation “unprecedented” and said he believed it stemmed from political pressure rather than legal concerns.

“This is not about my testimony or about building renovations,” Powell said. “Those are pretexts.”

The Federal Reserve lowered its key lending rate three times in the second half of 2025, bringing it to a range of 3.50% to 3.75%, its lowest level in three years. But President Trump has continued to argue that rates should have been cut more aggressively, pressing the central bank to ease borrowing costs for both the government and consumers.

White House officials declined to comment directly on the investigation, deferring questions to the Justice Department. A spokesperson reiterated criticism of Powell’s performance, saying any legal judgment must come from prosecutors.

Monday’s statement condemning the probe was signed by former federal officials appointed by both Democratic and Republican administrations, in a rare show of unity in a deeply polarised political climate.

Yellen, who served as Fed chair before Powell and later as Treasury Secretary, described the investigation as “extremely chilling,” suggesting it could send a troubling message to future central bank leaders.

“Knowing Powell as I do, the idea that he misled lawmakers is implausible,” she said in separate remarks. “This looks like an attempt to push him out of office.”

Financial markets reacted cautiously to the news. Major US stock indexes were broadly steady, though analysts warned that prolonged political pressure on the central bank could eventually unsettle investor confidence.

The controversy could also complicate the confirmation of Powell’s successor, as his term as Fed chair is due to end in May. One senior Republican senator said he would oppose any new Federal Reserve nominations until the matter is fully resolved.

Lawmakers from both parties have expressed concern that the investigation risks distracting the central bank at a critical moment for the US economy.

For decades, the Federal Reserve has been shielded from direct political pressure to preserve its credibility and effectiveness. Economists warn that any perception of legal or political retaliation against its leadership could erode that trust, not just domestically but globally.

As the investigation unfolds, the episode is shaping up as one of the most serious tests of central bank independence in modern US history.