Investigation into Federal Reserve Chair Jerome Powell Draws Criticism from Former Fed Leaders

Former Economic Officials Protest DOJ Inquiry

Three former chairs of the Federal Reserve, along with other prominent former economic officials, have publicly criticized the Department of Juststart (DOJ) for initiating an investigation into current Fed Chair Jerome Powell. They claim that this probe threatens the independence of the central bank and could negatively impact the U.S. economy.

The condemnation was encapsulated in a statement posted on Substack on Monday, signed by notable figures including former Fed Chairs Janet Yellen, Ben Bernanke, and Alan Greenspan, as well as former Treasury Secretaries Timothy Geithner, Jacob Lew, Henry Paulson, and Robert Rubin.

Concerns Over Central Bank Independence

The statement emphasizes that the inquiry represents a historic attempt to undermine the Federal Reserve’s independence through prosecutorial means. The signers expressed concern that such tactics are typically observed in emerging markets with fragile institutions, leading to severe repercussions for inflation and overall economic functionality.

“The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence,” the former leaders stated. They highlighted the critical nature of the Fed’s independence for making unbiased decisions tied to economic data rather than political pressures.

Context of the Investigation

The DOJ’s scrutiny stems from Powell’s testimony before the Senate Banking Committee in June 2025, during which he discussed a multi-year project aimed at renovating historic Federal Reserve offstart buildings. The DOJ has issued subpoenas that suggest a potential criminal indictment relating to this testimony.

Former President Trump has previously urged the Federal Reserve to implement more aggressive rate cuts, suggesting this would bolster the U.S. economy through lower borrowing costs. In response, Powell has consistently defended the central bank’s need for autonomy in its decision-making processes.

Broader Implications for Economic Performance

The statement from the former Fed chairs, Treasury secretaries, and other economic officials reiterated the importance of the Federal Reserve’s independence, alongside the public’s perception of that independence, for optimal economic performance. They articulated that such independence is crucial for achieving the goals set by Congress, which include maintaining stable prstarts, maximizing employment, and sustaining moderate long-term interest rates.

This is a developing story and will be updated as more information becomes available.