Federal Reserve Chairman Jerome Powell asserted that a Justice Department criminal probe constitutes an attack on the central bank's independence. In a statement released Sunday, Powell indicated that the investigation stemmed from the Fed's decision not to lower interest rates earlier in the year, despite demands from President Donald Trump.

According to Powell, the Justice Department issued grand jury subpoenas to the Federal Reserve following his testimony before the Senate in June regarding renovations to the Fed's headquarters, which have experienced cost overruns. He characterized the probe as politically motivated and unrelated to the renovations or his testimony, dismissing them as pretexts.

"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," Powell stated. He further emphasized the core issue at stake: "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditionsor whether instead monetary policy will be directed by political pressure or intimidation."

The Federal Reserve operates independently of the executive branch, with a mandate to maintain stable prices and full employment. This independence is intended to insulate monetary policy decisions from short-term political considerations. The Fed's monetary policy decisions are made by the Federal Open Market Committee (FOMC), which consists of the seven governors of the Federal Reserve System, the president of the Federal Reserve Bank of New York, and four other Reserve Bank presidents who serve on a rotating basis.

Powell noted his service under both Republican and Democratic administrations, underscoring the non-partisan nature of the Federal Reserve's mission. The Justice Department has not yet issued a public statement regarding the investigation. The investigation's current status and potential next steps remain unclear.