Federal Reserve Chair Jerome Powell says a Department of Justice probe into the central bank’s multibillion-dollar renovation project is a “pretext” to harass the Fed over its interest-rate decisions.
In a striking video statement, Mr. Powell revealed that the Fed received a grand jury subpoena on Friday over the testimony he gave to Congress about the project, which is over budget.
The Justice Department has not revealed any details about the probe, although Mr. Powell signaled that prosecutors may believe he lied to lawmakers about the renovations of Fed buildings in Washington.
“Those are pretexts,” Mr. Powell said Sunday. “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.”
For months, Mr. Trump has urged the Fed to cut interest rates deeply to boost the economy. Central bankers have cut rates recently, though more cautiously than Mr. Trump would like.
Mr. Trump told NBC News that he knew nothing about the probe.
“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” Mr. Trump said.
Mr. Powell’s term ends in May.
Mr. Trump is expected to name a successor soon. His top economic official, Kevin Hassett, is considered the front-runner.
Mr. Powell says he will serve out his term.
“Public service sometimes requires standing firm in the face of threats, he said. “I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
The Fed renovation project is over-budget by an estimated $700 million, which Mr. Trump has criticized repeatedly as foolish and perhaps related to fraud.
The president also has tried to reshape the Fed to his liking. He attempted to fire Fed Governor Lisa Cook over claims of mortgage fraud, sparking a legal fight that has reached the Supreme Court.
Mr. Powell told Congress that many claims about a lavish Fed renovation were untrue and that overruns were due to the unexpected cost of materials and other building issues.
