Washington is buzzing with tension as a Justice Department probe into Federal Reserve Chairman Jerome Powell raises questions about central bank independence.

On Sunday, Powell revealed that the Justice Department had served the Federal Reserve with grand jury subpoenas related to his earlier testimony on the Washington headquarters renovation project.

The following day, White House press secretary Karoline Leavitt addressed reporters outside the White House, stating that President Donald Trump did not instruct DOJ officials to investigate Powell.

The inquiry, approved by U.S. Attorney Jeanine Pirro, focuses on Powell’s public statements and spending records tied to a renovation project reportedly $700 million over budget, with costs nearing $2.5 billion.

Debate Over Fed Independence Intensifies

The situation has stirred markets and reignited discussions about whether political pressures are encroaching on institutions designed to remain insulated from Washington’s influence.

Powell has described the subpoena as a potential threat to the Fed’s autonomy, while the White House insists the investigation is not being orchestrated from the West Wing, Newsmax reported.  Trump’s top economic adviser, Kevin Hassett, also distanced himself, noting he was unaware of any involvement in discussions with the DOJ.

The clash over the Fed’s role has sparked sharp debate among policymakers and economic observers. While Powell warns of undue pressure on interest rate decisions, allies of the administration argue that accountability for massive spending overruns is long overdue.

Leavitt didn’t mince words when pressed on Trump’s view of Powell’s performance. “And one thing for sure, the president’s made it quite clear, is Jerome Powell is bad at his job,” she stated. It’s hard to disagree when you look at the sluggish pace of rate cuts that many believe should have happened ages ago.

Still, the White House is careful to draw a line between criticism and interference. When asked directly if Trump ordered the DOJ probe, Leavitt’s response was a blunt “No.” That clarity matters, even if skeptics might wonder about the timing of an inquiry amid public spats over monetary policy.

Renovation Costs Fuel Public Scrutiny

The renovation project at the Fed’s headquarters, with costs ballooning to nearly $2.5 billion, is a lightning rod for criticism. Hassett echoed public frustration, supporting scrutiny of such a high-dollar endeavor that’s drawn widespread ire. It’s tough to justify that kind of overrun when taxpayers are footing the bill.

Leavitt also hinted at the DOJ’s role in digging deeper into Powell’s conduct. “As for whether or not Jerome Powell is a criminal, that’s an answer the Department of Justice is going to have to find out, and it looks like they intend to find that out,” she remarked. If there’s even a whiff of mismanagement, shouldn’t the public know?

Meanwhile, Powell’s assertion that the threat of criminal charges is a tactic to sway Fed decisions on interest rates can’t be ignored. It’s a serious claim, and one that fuels fears of eroding institutional boundaries. But when costs spiral out of control, isn’t some level of oversight warranted?

Interest Rates Remain a Flashpoint

Trump has long been vocal about wanting lower interest rates, a view Leavitt reiterated by noting that many economists agree they should have been cut sooner. The Fed’s hesitance under Powell’s watch has frustrated those who see high rates as a drag on growth. It’s a fair critique when businesses and families are squeezed by borrowing costs.

Yet, the specter of political influence over the Fed looms large. Powell’s framing of the subpoena as an attack on independence resonates with those wary of executive overreach. Still, accountability isn’t meddling—it’s a check on power.

On the legislative front, Republican Sen. Thom Tillis of North Carolina has vowed to block Federal Reserve nominees until the Powell issue is settled. Leavitt declined to comment directly on Tillis’s stance, deferring to the White House’s legislative team. It’s a bold move, though, signaling just how high the stakes have climbed. over.