A video of an interaction between Federal Reserve chair Jerome Powell and President Donald Trump from July has resurfaced on social media after the Department of Justice (DOJ) launched an investigation into the Fed on Friday
The DOJ subpoenaed the Fed concerning allegations that Powell lied during testimony to the Senate Banking Committee last year regarding the scope of expensive Fed reservations.
Trump told NBC News in an interview on Sunday night that he doesn’t “know anything about it,” adding that Powell is “certainly not very good at the Fed and he’s not very good at building buildings.”
Why It Matters
The DOJ’s criminal investigation into Powell marked a dramatic escalation of tensions between the Trump administration and the Central Bank, inciting significant turmoil in financial markets.
Last year saw Trump routinely assail Powell, whom he nominated in 2017, over the Fed’s reluctance to slash interest rates as swiftly or as much as he desired. The president dubbed the central bank’s chief “too-late Powell,” as well as a “numbskull” and “Trump hater,” while also suggesting he could remove him before his term ends and threatening legal action over what he said was Powell’s “grossly incompetent” handling of the D.C. renovations.
Powell has claimed the investigation is a result of these threats.
Meanwhile, many investors interpreted the DOJ’s move as an effort to challenge the Fed’s independence—a principle widely seen as crucial for maintaining monetary stability and investor confidence.
What To Know
The DOJ’s investigation centers on the Fed’s $2.5 billion renovation project for two historic office buildings in Washington, D.C., which has run about $600 million over budget.
A DOJ spokesperson said they could not comment on specific cases but noted Attorney General Pam Bondi “has instructed her U.S. attorneys to prioritize investigating any abuse of taxpayer dollars.”
The Fed is not funded through taxpayer dollars. The central bank and its regional banks are funded by fees on services like check processing, loans to corporate banks, and income from its investment portfolio of U.S. government bonds, foreign currencies and other securities.
In the resurfaced footage from July, Trump, in front of reporters, suggested the cost of the Fed building renovations was at $3.1 billion, saying, “It went up a little bit, or a lot. The 2.7 is now 3.1 [billion],” and showed Powell a piece of paper.
“I’m not aware of that,” Powell said in the clip to which Trump responded: “It just came out.”
“You’re including the Martin renovation. You just added in a third building,” Powell said examining the paper that Trump handed him.
Trump responded: “It’s a building that’s being built.”
Handing Trump the paper back, Powell then said: “It was built five years ago. We finished Martin five years ago. It’s not new.”
Powell criticized the DOJ in a video on Sunday, suggesting it was related to his Senate testimony in June.
“No one—certainly not the chair of the Federal Reserve—is above the law,” Powell said. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
He added: “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.”
In response, Trump told NBC News that the subpoenas have nothing to do with interest rates, “I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got. He’s hurt a lot of people. I think the public is pressuring him.”
Last month, the president first proposed the idea of filing a lawsuit against Powell related to government renovations.
“We’re thinking about bringing a suit against Powell for incompetence. … He said, $4 billion more, it’s going to end up causing more than $4 billion, $4 billion. It’s the highest price of construction,” Trump said at Mar-a-Lago on December 29. “There is nothing you can do about he’s just a very incompetent man, but we’re going to probably bring a lawsuit against him.”
What People Are Saying
Charlotte Clymer, a veteran formerly stationed at Arlington National Cemetery, wrote on X on Monday: “Flashback to this past July when Jerome Powell corrected Trump’s math on national television, live, and called out his disinformation.”
Conservative influencer Nick Sortor wrote on X on Sunday: “He [Powell] LIED TO CONGRESS about massive Federal Reserve spending on his massive ‘renovation’ boondoggle. Jail might be in Powell’s future!”
Fed chair Jerome Powell said in a statement on Sunday: “I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
Senator Thom Tillis, a North Carolina Republican and a member of the Banking Committee, said per NBC News: “I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved. If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none.”
Massachusetts Senator Elizabeth Warren, the top Democrat on the Banking Committee, said in a statement to NBC News that Trump is “abusing the authorities of the Department of Justice like a wannabe dictator so the Fed serves his interests, along with his billionaire friends.”
She added: “This Committee and the Senate should not move forward with any Trump nominee for the Fed, including Fed Chair.”
What Happens Next
Powell’s term as Fed chairman is scheduled to end in May, but he will serve on the Federal Reserve Board of Governors until at least 2028.
