Former Fed chiefs, economists warn DOJ probe of Powell threatens Federal Reserve independence
WASHINGTON (Times Media Service) — Former Federal Reserve chairs Alan Greenspan, Ben Bernanke and Janet Yellen warned Monday that a reported DOJ criminal probe of Chair Jerome “Jay” Powell threatens the Fed’s independence, calling the inquiry an unprecedented prosecutorial attack.
- Former chairs Greenspan, Bernanke and Yellen issued a joint statement calling the reported inquiry “an unprecedented attempt to use prosecutorial attacks to undermine that independence,” per ABC News: “DOJ’s criminal probe of Fed Chair Powell” (business report).
- The DOJ opened a criminal probe after Powell’s June 2025 testimony about cost overruns on the Fed headquarters renovation, following a criminal referral from Rep. Anna Paulina Luna, as reported by ABC News: “DOJ launches criminal investigation into Fed Chair Jerome Powell” (politics report).
- Powell denies wrongdoing and frames the probe as politically motivated pressure to influence monetary policy decisions.
- Critics warn the investigation risks chilling frank testimony and eroding the Fed’s ability to make independent, data-driven policy choices.
Full report
Overview. A bipartisan group of economists and former top Federal Reserve officials — notably ex-Chairs Alan Greenspan, Ben Bernanke and Janet Yellen — issued a joint statement Monday condemning a reported Department of Justice criminal probe into current Fed Chair Jerome “Jay” Powell. The signers said the inquiry represents an unprecedented attempt to undermine central bank independence and could have serious implications for monetary policy and markets.
What the statement said and who signed it
The joint statement from the three former chairs framed the reported criminal inquiry as a serious risk to the Federal Reserve’s ability to do its job without political interference. As the statement put it: “The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence.”
“The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence.”
Greenspan, Bernanke and Yellen served across multiple administrations and together led the central bank for roughly three decades. The publicly verified signatories named in reporting are the three former Fed chairs; other outlets and social posts have suggested additional signers, but those names were not explicitly verified in the primary coverage used for this article (ABC News business report).
Why the DOJ probe started
The investigation centers on Powell’s June 2025 testimony to the Senate Banking Committee regarding the Federal Reserve’s multi-billion-dollar renovation of its Washington headquarters. Rep. Anna Paulina Luna submitted a criminal referral alleging Powell made false statements to Congress about which renovation items were included. The Justice Department subsequently opened a criminal probe into whether Powell lied under oath (ABC News politics report).
Powell’s response
Powell has denied wrongdoing. In public remarks quoted in reporting, he described the probe as politically motivated pressure aimed at influencing Fed decisions on interest rates. He 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.” Powell characterized the move as part of broader pressure on the Fed (ABC News business report).
Why top economists are speaking out
It is rare for Fed leaders from both parties to issue a joint rebuke while an active federal investigation is underway. The coordinated statement from three ex-chairs — spanning leadership during market shocks and crises — signals concern that prosecutorial threats aimed at a sitting central bank chief could set a dangerous precedent, erode market confidence and hinder the Fed’s capacity to combat inflation or recession.
Legal and political stakes
A criminal investigation into a sitting Fed chair raises thorny legal questions about intent and the standards for prosecuting statements made under oath in highly political settings. Legal experts note that proving criminal intent for congressional testimony is difficult and rare. Still, the mere threat of indictment can influence testimony and policymaking behavior. Supporters of the referral argue public officials must be held accountable and that false testimony should be investigated irrespective of office; opponents counter that such actions risk politicizing the Fed.
Historical context: Federal Reserve independence
Economic analysts and market participants often stress that the Fed’s political independence is central to maintaining stable prices and effective macroeconomic management. Historically, Fed chairs have sought to insulate monetary policy from direct political control. The joint statement invokes that tradition and warns that using prosecutorial pressure to influence interest-rate decisions would be an unprecedented assault on institutional independence (ABC News business report).
Implications for Las Vegas, Nevada
Economic impact
- Borrowing costs: Interest-rate uncertainty could affect mortgages, business loans and consumer credit—key to Nevada families and businesses.
- Construction and investment: Casino projects and resort construction depend on predictable credit conditions; politicized policy could raise financing costs or delay projects.
Political consequences
Nevada leaders and candidates may weigh in on national debates about institutional independence. Local officials focused on stability may push for clearer protections for the Fed, while other politicians might leverage the controversy to argue for accountability or oversight.
Social effects
Many Las Vegas households carry adjustable-rate debt or face housing-cost pressures. If markets react to the investigation, changes in interest rates could alter monthly payments and job prospects in tourism-related service industries.
Cultural relevance
Las Vegas’ cultural and economic identity—built on travel and discretionary spending—makes the city sensitive to shifts in consumer confidence. Any monetary-policy friction that reduces leisure spending could have outsized local effects.
Practical applications for residents
- Homeowners and renters: Monitor mortgage and loan rates; consider consulting financial advisors about refinance timing if markets become volatile.
- Small-business owners: Review cash flow plans and credit lines given potential changes in borrowing costs or consumer demand.
- Local leaders: Increase outreach to federal officials and regulators to protect Nevada’s economic interests during uncertainty.
Sources and reporting notes
This article is based on reporting from ABC News and related coverage of the DOJ probe and the joint statement. Key sources include:
- ABC News: “DOJ’s criminal probe of Fed Chair Powell” (business report)
- ABC News: “DOJ launches criminal investigation into Fed Chair Jerome Powell” (politics report)
Reporting for this story sought to confirm all named signatories and used the ABC News coverage as the primary verified source for the joint statement and details of the DOJ probe. Additional names of potential signers have circulated but were not explicitly verified in those reports.
