Breaking News

What's Happening: DOJ Opens Criminal Probe of Fed Chair

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Current Status (Jan 12, 2026)
Powell issued a public statement: DOJ served the Federal Reserve with grand jury subpoenas and "threatened a criminal indictment" related to his June 2025 Senate testimony about the headquarters renovation.

Timeline of Events

2024
Fed HQ Renovation Begins
Modernization of Eccles Building and 1951 Constitution Avenue. Initial estimate: $1.88 billion.
June 2025
Powell Testifies to Senate Banking Committee
Addresses renovation scope, costs, and justification. This testimony becomes the nexus of the criminal investigation.
Mid-2025
Cost Estimate Rises to $2.46 Billion
Scope changes, lead/asbestos remediation, and historic preservation requirements drive increases.
January 11-12, 2026
DOJ Opens Criminal Investigation
Grand jury subpoenas served on Federal Reserve. Powell publicly states DOJ threatened criminal indictment.

The Department of Justice has served subpoenas on the Federal Reserve and has threatened me with a criminal indictment in connection with my testimony before the Senate Banking Committee.

- Jerome Powell, Federal Reserve Chair, January 11, 2026

The Core Legal Questions

Three Colliding Frameworks

  • Criminal Law: What would DOJ need to prove? Use the Charge Analyzer to test the elements.
  • Removal Power: Can a President remove a Fed Chair? Run the Removal Simulator to see the constraints.
  • Institutional Independence: How does criminal pressure affect Fed credibility? Try the Independence Stress Test.
Sources
Interactive Tool

Criminal Charge Analyzer: Does It Stick?

Select the facts as you understand them. The tool evaluates whether DOJ can make a case under 18 USC 1001 (false statements) or 1621 (perjury).

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18 USC 1001 / 1621 Element Tester

Toggle each element to see how the case changes

Analysis Result

Select options and click "Analyze Charges" to see the legal assessment.

Key Legal Insight

  • 18 USC 1001 (false statements): Requires a materially false statement in any matter within federal jurisdiction, made knowingly and willfully.
  • 18 USC 1621 (perjury): Requires an oath authorized by law, a materially false statement, and willful intent. "Literally true" statements are a complete defense.
  • Estimates vs. lies: A cost projection that later proves wrong is not automatically false - DOJ must show the speaker knew it was wrong when stated.
Legal Sources
Interactive Tool

Fed Chair Removal Simulator

Can the President remove the Fed Chair? Configure the scenario and see what legal constraints apply.

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Removal Power Analysis

Test different removal scenarios against current law

Removal Analysis

Configure the scenario and click "Simulate Removal" to see the analysis.

Removal is not permitted under the law... The law is clear.

- Jerome Powell, on whether the President can fire him

Key Precedents
Interactive Tool

Fed Independence Stress Test

How much pressure can Fed independence withstand? Adjust the sliders to model different scenarios.

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Institutional Pressure Model

Simulate different combinations of executive pressure

Low
0 = No investigation | 100 = Active prosecution
Low
0 = No pressure | 100 = Daily public demands
Low
0 = No threat | 100 = Imminent removal attempt
Medium
0 = No support | 100 = Strong bipartisan defense
Independence Risk Assessment

Adjust the sliders and click "Run Stress Test" to see the institutional risk assessment.

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Why Independence Matters
Central bank independence isn't about being "above politics" - it's about credible commitment. If markets believe the Fed will cut rates whenever a President demands, inflation expectations become unanchored. The Nixon-Burns episode (1971-72) contributed to the Great Inflation of the 1970s.
Historical Context