On January 9, 2026, the Department of Justice (DOJ) served grand jury subpoenas to the Federal Reserve regarding statements made to Congress by Federal Reserve Chair Jerome Powell, indicating that the DOJ is opening a criminal investigation into Chair Powell.  

Powell’s term as Chair ends on May 15, 2026, after which Trump would be able to nominate a new Chair to the Senate to confirm. In his own statement responding to the subpoenas, Powell indicated that he planned to continue serving in this role, and that he considered the threat of criminal charges an attempt to pressure him to conduct monetary policy according to “the preferences of the president.”  

This action is another part of Trump’s ongoing attempt to bring the Federal Reserve, or “Fed,” under his control and to be able to micromanage their policy decisions for his own gain. In 2025, Trump also attempted to fire Dr. Lisa Cook from the Fed’s Board of Governors, though a ruling from the Supreme Court has allowed her to continue serving in her role while the litigation over her firing proceeds through arguments before the Court in 2026.  

The Fed is the central bank of the United States, and is responsible for the U.S. government’s monetary policy. Its key job is to maintain macroeconomic stability, which means trying to ensure both unemployment rates and inflation are kept low. (As EPI has written on extensively, the Fed has not always gotten that balance right.) Evidence-based economic decision-making and the guarantee of freedom from political interference are both central to the Fed’s operations. If there is widespread belief that interest rates or other decisions by the Fed are driven by the whims of the President or a politically-driven Board of Governors, then confidence in the Fed will evaporate and lead to serious economic consequences for the U.S., including higher inflation and interest rates in the long run 

It is fair enough for Presidents to have opinions about monetary policy decisions – and today the correct route on monetary policy and interest rates is quite contested even by genuine experts. The danger, however, is that if a President is able to completely capture the policymaking decisions of the Fed that he might systematically make decisions that boost his own electoral prospects even if it erodes long-term economic performance. The campaign to criminalize monetary policy dissension from Federal Reserve officials is a strong signal that the President exactly aims for this kind of complete control of Fed policy.  

President Trump, has openly expressed that he wants to the Fed to significantly cut interest rates in order to make borrowing easier and spur economic growth. Yet at the same time, his signature tax policy bill adds to deficits and increases upward pressure on interest rates, and his tariff policy is pushing up prices. If inflationary pressures continue to build while he successfully forces the Fed to keep their own short-term interest rates inappropriately low in the face of this, this will just lead to long-term market-based interest rates – like those for credit cards, car loans, and mortgages – rising further and will keep inflation from being brought back under control. As inflation expectations and long-term interest rates rise, long-term economic growth in the United States will be severely damaged.