A unprecedented situation is unfolding in the United States ⚠️: The Department of Justice has launched a criminal investigation against current Chair of the Federal Reserve Jerome Powell.
The formal reason was his testimony before the Senate regarding the reconstruction of Federal Reserve buildings in Washington 🏛️ and possible inaccuracies in the project's cost estimation.
This concerns an infrastructure project worth $2.5 billion 💰, estimated to last about 10 years. It was approved back in 2017, the active phase of construction started in 2022, and completion is expected in 2027 ⏳.
🔍 What are the essence of the claims
Prosecutors are checking whether Powell misled Congress when he stated that the project does not contain 'luxurious elements' and is purely functional in nature 🧾.
Later published budgets and internal documents raised doubts among some lawmakers, which became the basis for a legal review ⚖️.
Importantly, this is not about embezzlement, but about a possible inconsistency between public statements and project data.
🧨 Political context
Jerome Powell himself called the investigation a tool of political pressure 🎯, which has no direct relation to real financial oversight.
In his opinion, the real reason is the Fed's tough stance on interest rates 📈.
Powell was appointed chairman of the Fed by Donald Trump in 2018, but Trump has been publicly criticizing him for a long time for his unwillingness to lower the rate.
The former president insists that the interest rate in the US remains too high 🏦, stifling economic growth. At the same time, Trump denies his involvement in the investigation but continues to publicly criticize the head of the Fed.
📉 Market reactions and macro risks
For financial markets, this story is a serious signal 🚨.
The key fear of investors is the undermining of the independence of the US central bank, which has been the foundation of trust in the dollar and the entire financial system for decades.
Against this backdrop:
• 💵 the dollar shows increased volatility;
• 🪙 interest in defensive assets is growing;
• 📊 traders are closely monitoring any signals regarding future monetary policy.
📌 Conclusion
The investigation against the current head of the Fed goes far beyond a single infrastructure project. For the markets, this is a test of the independence of US monetary policy and a potential factor of increased volatility in the near future.