Departamento of Justiça of Estados Unidos opened a criminal investigation against Jerome Powell, president of Federal Reserve (Fed), the American central bank. The investigation, confirmed by Powell himself in a written and video statement released on Sunday (11), involves his testimony to Congresso in June last year about the renovation of the Fed headquarters in Washington. Powell stated that the measure represents a threat to the institution’s independence in setting interest rates, amid recurring political pressure.
The grand jury subpoena was delivered to Fed on Friday (9). The inquiry analyzes public statements by Powell and spending records for the renovation project, whose current cost is estimated at US$2.5 billion. Powell highlighted that the investigation is not limited to reform, but reflects attempts to influence monetary decisions based on economic evidence rather than political preferences.
Gold and silver hit new all-time highs in reaction to the news. Gold was up around 2%, trading at US$4,599.87 per troy ounce at around 8am (Nova York local time), while silver rose 6% to US$84.6090 per ounce. Futuros of American shares retreated, and the dollar fell against other currencies, including Brasil, where it was quoted at R$5.3540 at around 9 am, down 0.21%.
Immediate reaction in global markets
The disclosure of the investigation generated immediate volatility in financial markets. Investidores sought protective assets, boosting precious metals amid uncertainty over Fed’s autonomy.
The dollar weakened globally, reflecting concerns about the credibility of US monetary policy. Futuros of stock indices in the Estados Unidos opened lower, signaling caution from market participants.
Analysts noted that the episode reinforces fears about political interference in the economy, which could affect confidence in dollar-denominated assets.
Details of the questioned reform
The renovation of the historic Fed headquarters buildings in Washington involves two buildings and includes updates to older structures. Costs rose from US$1.9 billion in 2023 to US$2.5 billion in 2025, due to variations in materials, labor and unforeseen events such as toxic contamination.
Powell disputed, in a statement to Senado in June, accusations of extravagant elements in the project, such as a VIP dining room and rooftop gardens. Ele explained that the plans evolved and some initial features were eliminated.
Budget documents from Fed were presented to Congresso, and the institution stated that it maintained transparency about the progress of the work. Críticas government and Republican parliamentarians questioned the management of resources.
Context of the political dispute
Tension between president Donald Trump and Powell has persisted since the appointment of the current president of Fed in 2017 by Trump himself. The president demanded aggressive cuts in interest rates to encourage housing and reduce government financing costs.
Trump threatened to fire Powell and indicated that he had already chosen a replacement, although without revealing the name. Kevin Hassett, director of Conselho Econômico Nacional, appears as a possible favorite for the position.
Powell’s term as president of Fed ends in May, but his seat on the board runs until 2028. Ele has not signaled whether he will step down or stay on.
Declaration of Powell on independence
Powell said he intends to perform his duties with integrity and commitment to the American people. Ele emphasized that interest rates are set based on an assessment of public interest and economic conditions.
The president of Fed warned that the threat of criminal charges calls into question whether monetary policy will continue to be guided by evidence or become influenced by pressure or intimidation. Ele reiterated respect for the law and democratic accountability.
Powell highlighted having served under cross-party administrations without fear or political favor, focusing on the mandate of price stability and maximum employment.
Positions on Congresso and government
Republican Senator Thom Tillis, a member of Comitê Bancário from
Tillis stated that the episode eliminates doubts about attempts to end Fed’s independence, now questioning the credibility of Departamento from Justiça.
Last month, the Fed reduced the base rate to the range of 3.5% to 3.75%, the third consecutive cut of 0.25 percentage points. Authorities indicated caution for further adjustments pending more data on inflation and employment.
The next meeting of the monetary policy committee is scheduled for January 27th and 28th, with the market pricing in a minimal chance of a change in the rate.
