In an unprecedented display of institutional solidarity, every living former leader of the Federal Reserve has joined forces to condemn a criminal investigation into current Chair Jerome Powell, warning that the move threatens to “shatter” the independence of the American economy.
The joint statement, signed by former Chairs Janet Yellen, Ben Bernanke, and Alan Greenspan, alongside four former Treasury Secretaries, was issued Monday morning after it emerged that the Department of Justice had served the Fed with grand jury subpoenas. The probe ostensibly centers on Powell’s June 2025 congressional testimony regarding a $2.5 billion renovation of the Fed’s historic headquarters—an inquiry Powell has dismissed as a “thinly veiled pretext” for political retaliation.
“The reported criminal inquiry into Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine the independence of the central bank,” the statement read. “This is how monetary policy is made in emerging markets with weak institutions… it has no place in the United States.”
The Charges: Renovations or Retaliation?
The Department of Justice, reportedly acting on instructions to prioritize “abuse of taxpayer dollars,” is investigating whether Powell committed perjury during a Senate Banking Committee hearing last summer.
At the heart of the dispute is a massive renovation project that President Trump has labeled “the most ostentatious in history.” While the administration alleges the project includes “VIP dining rooms and white marble finishes,” Powell has maintained the costs are driven by modern security requirements and the removal of hazardous materials like asbestos.
However, in a defiant video address released Sunday night, Powell stripped away the technicalities.
“This is not about my testimony or building renovations,” Powell said. “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.”
A Unified Front of Economic Titans
The backlash against the probe has united an often-fractious group of economic thinkers from both sides of the political aisle.
The Signatories of the Condemnation:
- Former Fed Chairs: Alan Greenspan, Ben Bernanke, Janet Yellen.
- Former Treasury Secretaries: Henry Paulson, Timothy Geithner, Robert Rubin, Jacob Lew.
- Leading Economists: Gregory Mankiw, Jason Furman, and Kenneth Rogoff.
The group warned that politicizing the Fed risks a return to 1970s-style “stagflation” and could trigger a global revolt in the bond markets. “If the Fed’s decisions are seen as being dictated by the threat of handcuffs rather than data, the credibility of the U.S. Dollar is finished,” said one signatory who spoke on the condition of anonymity.
Political Fallout and Market Reaction
The investigation has sent shockwaves through the financial world and the halls of Congress.
- Markets: Gold and silver surged to record highs as investors fled to safe-haven assets. The U.S. Dollar weakened significantly against the Euro and Yen on Monday.
- Congress: Republican Senator Thom Tillis (N.C.) broke ranks with the White House, announcing he would oppose any of the President’s future nominees to the Fed—including a potential successor for Powell in May—until the “legal coercion” ends.
- The White House: President Trump has denied involvement in the probe, telling reporters, “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.”
As the DOJ prepares to present its case to a grand jury, the standoff has become the most significant constitutional crisis involving the central bank in its 113-year history. Powell, whose term as Chair expires this May, has vowed not to resign, stating that “public service sometimes requires standing firm in the face of threats.”