Former Fed Leaders Criticize Criminal Investigation Against Jerome Powell

Former Federal Reserve Leaders, Including Janet Yellen, Contest Criminal Inquiry Into Chairman Jerome Powell

Three former heads of the U.S. central bank strongly criticized a criminal investigation against Jerome Powell on Monday, labeling it an attempt to undermine the independence of the Federal Reserve. Janet Yellen, Ben Bernanke, and Alan Greenspan, along with ten other former high-ranking officials, have joined Powell in this response.

"This is how monetary policy is conducted in emerging markets with weak institutions, leading to extremely negative consequences for inflation and the overall functioning of their economies," the former officials stated. "This does not occur in the United States, where our greatest strength is the rule of law, the foundation of our economic success," they added.

This action from the Department of Justice follows a year of constant attacks against Powell from U.S. President Donald Trump. In addition to critiquing Powell's decisions regarding interest rates, Trump has launched personal attacks, calling the Fed chairman "a big loser" and "incompetent." The President stated that he was unaware of this investigation.

The investigation was revealed by Powell on Sunday in an unsolicited video statement, where he mentioned that the Justice Department threatened him with criminal charges for statements made in a Senate committee about renovations at the Federal Reserve buildings. Powell termed the inquiry as "unprecedented" and said it stemmed from Trump's frustration that the Fed did not lower interest rates more quickly.

"This new threat has nothing to do with my June statement or the renovation of Fed buildings," Powell emphasized. "These are pretexts." The central bank has cut the target federal funds rate three times in the second half of 2025, reaching a range of 3.50%-3.75%, the lowest level in three years.

Yellen, who served as Fed chair for a year during Trump’s first term, called the investigation "extremely concerning." "Knowing Powell, the chances that he lied are zero, so I believe they are hunting him because they want his seat and want to remove him," Yellen remarked.

Trump is expected to nominate someone to replace Powell, whose term will expire in May, but the Justice Department's investigation and subsequent reactions could disrupt the confirmation process.