Federal Reserve Has Not Turned Over Subpoenaed Records in Criminal Inquiry of Chair Powell

Federal prosecutors in Washington, D.C., have issued grand jury subpoenas in a criminal inquiry that names the chair of the U.S. central bank, and the Federal Reserve has so far declined to turn over the material demanded. The subpoenas are reported to relate in part to testimony Chair Jerome Powell provided to lawmakers and to a high-profile renovation of the Fed’s headquarters that has attracted scrutiny because of its scale and cost. The U.S. Attorney’s Office for the District of Columbia is leading the probe; while the existence of subpoenas is public, there is no known court-imposed deadline for compliance. Powell has publicly acknowledged the investigation and framed it in part as arising from political friction over policy choices, a characterization that elevates the institutional stakes. Practically, the Fed is now managing parallel pressures: internal legal review of the subpoenaed materials and intensified external scrutiny that could complicate communications in the run-up to policy meetings. That tension arrives against a backdrop of mixed economic signals — moderating but uneven inflation readings and softer payrolls that have prompted some officials to favor a near-term pause — which makes clear public guidance especially consequential. Markets have adjusted pricing for rate moves in light of those data and governance uncertainty, and committee composition and the calendar for Powell’s term (which expires in May) add further political and operational variables. The Fed’s response options include negotiating limited production, seeking judicial relief, or ultimately complying; each path would carry distinct legal, political and precedent-setting consequences for agency independence. A negotiated turnover might short-circuit court fights but could be perceived as political concession, while litigation would prolong uncertainty and could produce a judicial ruling on the scope of investigatory power over an independent agency. Beyond immediate legal exposure, the episode raises reputational and governance risks that could strain the Fed’s capacity to communicate policy and manage expectations. If the inquiry expands or results in indictments, congressional oversight and statutory responses are likely, adding long-term complexity to monetary governance. Observers should track any filings, judicial responses, and statements from the Department of Justice and the Federal Reserve for signals about legal strategy and implications for policymaking and institutional norms.