Trump has escalated his verbal assault on Federal Reserve Chair Jerome Powell, delivering his harshest criticism yet amid a Department of Justice criminal investigation into the central bank's operations. Speaking to reporters outside the White House, Trump called Powell either "incompetent or crooked" while referencing cost overruns in the Fed's headquarters renovation project.

Trump's Escalating Rhetoric

Trump's latest attack centered on financial management issues at the Federal Reserve, specifically targeting cost overruns in the multibillion-dollar renovation of the Fed's Washington headquarters. "He's billions of dollars over budget," Trump stated, directly linking his criticism to the renovation project that has become the focus of the DOJ's probe.

The confrontation reached a particularly personal tone when Trump declared, "That jerk will be gone soon," representing his most aggressive language yet toward the Fed chair. Trump's comments came after being questioned about whether the DOJ investigation erodes trust in the Federal Reserve's traditional independence from executive branch interference.

DOJ Investigation Details

The Department of Justice investigation has focused on cost overruns and Powell's congressional testimony regarding the Fed's headquarters renovation. According to official statements, the United States Attorney's Office contacted the Federal Reserve multiple times to discuss these issues but received no response, necessitating the use of legal processes.

Powell responded on Sunday night, claiming the DOJ threatened "criminal indictment" and sent grand jury subpoenas related to his earlier Senate testimony about the ongoing renovations. The Fed chair drew a direct connection between the investigation and Trump's repeated complaints about the pace of interest rate cuts.

Bipartisan Pushback

Trump's attack on Powell has generated significant bipartisan criticism, with lawmakers and business leaders defending the Federal Reserve's independence. JPMorgan Chase CEO Jamie Dimon publicly stated, "Everyone we know believes in Fed independence," reflecting broader business community sentiment.

The criticism spans party lines, with both Democratic and Republican figures expressing concern about potential executive branch interference in Federal Reserve operations. This bipartisan response highlights the traditional respect for Fed independence that has characterized American monetary policy for decades.

Federal Reserve Response

The Federal Reserve issued a video message from Powell addressing the situation, though specific details of his response were not elaborated. The central bank's public communication represents an unusual step, given the institution's typical preference for measured, technical communications rather than political responses.

The controversy occurs against the backdrop of ongoing monetary policy debates, with Trump having previously criticized the Fed's approach to interest rate adjustments. Powell's position as Fed chair, traditionally insulated from political pressure, has become increasingly politicized under these circumstances.

Federal Reserve Chair Jerome Powell has adopted a markedly different approach to political pressure, shifting from years of restraint to publicly challenging attacks on the central bank's independence. This transformation has become particularly evident in recent confrontations with the Trump administration over monetary policy decisions.

Escalating Tensions Over Fed Independence

Powell recently accused the Trump administration of using prosecution threats to influence Federal Reserve monetary policy decisions. He specifically warned that a Justice Department investigation directed at him represents a serious threat to the Fed's institutional independence. This public pushback marks a significant departure from Powell's previous strategy of avoiding direct engagement with political criticism.

Strategic Shift in Response Approach

Throughout much of his tenure, Powell maintained a policy of restraint when facing criticism, including during Trump's first presidential term when the Fed chair endured repeated attacks over interest rate decisions. Analysts note that his willingness to speak out forcefully now demonstrates how seriously he views the potential erosion of institutional autonomy.

Powell's background includes serving as an investment banker before taking charge of the Fed in 2018, succeeding Janet Yellen. Despite having no formal economics training and being a Republican, he earned bipartisan confidence, leading to his renomination by Democratic President Biden for a second term.

Navigating Economic Challenges

Powell's leadership has been tested through multiple economic crises and policy shifts:

• COVID-19 Response: Led swift action to cut rates to near zero and deploy emergency measures in 2020
• Inflation Combat: Oversaw aggressive rate hikes in 2022 to address post-pandemic inflation
• Recent Adjustments: Adopted more cautious stance in 2024 and 2025 as inflation pressures eased

Throughout these challenges, Powell has worked to build consensus within the Fed's rate-setting committee while defending institutional independence.

Current Political Confrontations

With less than a year remaining in his term, Powell has again become a target of criticism from Trump, who is now serving a second presidential term. The president has criticized the Fed chair for not cutting rates faster and has suggested Powell could be removed over alleged mismanagement of a multibillion-dollar Federal Reserve headquarters renovation.

Powell has demonstrated some flexibility since Trump's return to office, including scaling back the Fed's climate-related risk work. However, analysts indicate that recent attacks have crossed a line, prompting his sharp response to the Justice Department investigation.

Defining Moments and Legacy

Powell's more assertive approach became visible during a July appearance alongside Trump at the Fed's renovation site, where he publicly corrected the president's claims about escalating costs. This rare on-camera rebuttal reinforced perceptions of a Fed chair willing to challenge political narratives when necessary.

Before joining the Federal Reserve board in 2012 under President Obama, Powell worked at the Bipartisan Policy Center and served briefly in the Treasury Department during the George H.W. Bush administration. His career spanning multiple administrations of both parties now appears to be culminating in a period that will define his reputation as a central banker operating under extraordinary political pressure.