Powell Expected to Skip Congressional Testimony Amid DOJ Criminal Investigation

Federal Reserve Chair Jerome Powell is expected to skip his scheduled February testimony to Congress regarding economic developments, following the disclosure that the Department of Justice has launched a criminal investigation targeting the Fed Chair, according to Republican Representative Bryan Steil of Wisconsin [1]. The DOJ served grand jury subpoenas to the Federal Reserve on January 9, 2026, threatening potential criminal indictment related to Powell’s June 2025 congressional testimony concerning Fed headquarters renovations [2][3]. Powell publicly characterized the investigation as a pretext for political pressure aimed at compelling the Fed to lower interest rates, an assertion that raises profound questions about the independence of America’s central banking system [3]. While markets experienced an initial selloff on January 12, subsequent recovery suggests investors remain skeptical about the investigation’s prospects, though constitutional and institutional concerns persist across the political spectrum [4][5].

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The criminal investigation into Fed Chair Jerome Powell originated from questions surrounding testimony the Fed Chair provided to the Senate in June 2025 regarding renovations to the Federal Reserve’s headquarters building [2][3]. The DOJ served the Federal Reserve with grand jury subpoenas on Friday, January 9, 2026, initiating what represents an unprecedented criminal investigation of a sitting Federal Reserve Chair. Powell addressed the investigation in a video statement released on Sunday, January 11, 2026, characterizing the action as fundamentally about whether monetary policy would be determined by economic evidence or political pressure [3].

The investigation arrives at a particularly sensitive juncture, as Powell’s current term as Fed Chair is scheduled to conclude in May 2026. The timing has prompted speculation about whether the investigation might influence succession planning and the selection of Powell’s replacement, though administration officials have not explicitly connected the investigation to-term decisions [3][7].

Representative Bryan Steil’s announcement that Powell is expected to skip his February testimony raises significant questions about compliance with statutory requirements. The 1978 Federal Reserve Act mandates that Fed Chairs provide testimony to Congress twice annually regarding economic developments and monetary policy implementation [1]. Should Powell decline to appear before the House Financial Services Committee and the Senate Banking Committee, this would constitute a potential violation of federal law, regardless of the ongoing DOJ investigation.

Representative French Hill of Arkansas, who chairs the House Financial Services Committee, has also indicated that Powell likely will not testify, citing the investigation’s complicating circumstances [7]. However, the Federal Reserve has not issued a formal statement confirming Powell’s intentions regarding the February testimony schedule, leaving congressional oversight plans in a state of uncertainty [1].

The investigation has revealed notable divisions within the Republican Party, despite unified control of both the executive branch and Congress. While the investigation originated from the Trump administration’s Department of Justice, not all Republican lawmakers have embraced the approach. Representative French Hill publicly characterized the investigation as an “unnecessary distraction” from the committee’s substantive work on financial services legislation [7]. This congressional skepticism contrasts with the executive branch’s apparent willingness to pursue criminal accountability against the Fed Chair, suggesting potential constraints on the investigation’s trajectory.

Former Federal Reserve officials and living predecessors of Powell have also expressed alarm at the precedent established by a criminal investigation targeting a sitting central bank governor. The Federal Reserve’s independence, cultivated over decades as a cornerstone of U.S. financial stability, faces unprecedented scrutiny as the investigation unfolds [2][4].

Financial markets demonstrated resilience in responding to the investigation’s revelation. Following an initial selloff on January 12, 2026, markets recovered substantially, with analysts characterizing investor sentiment as skeptical that the investigation will produce meaningful consequences [4][5][6]. One analyst quoted by ABC News noted that “investors don’t think the investigation is going to go anywhere,” reflecting confidence that the constitutional tensions surrounding the investigation would ultimately constrain its prosecutorial ambitions [5].

The relative market stability suggests that investors are differentiating between political noise and fundamental economic policy implications. As of the current analysis, the Federal Reserve has not signaled any deviation from its data-driven approach to monetary policy, and upcoming interest rate decisions continue to be framed as responses to economic conditions rather than political pressure [4][6].

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The DOJ investigation of the Fed Chair represents a fundamental challenge to the framework of central bank independence that has underpinned U.S. monetary policy since the Federal Reserve Act’s passage in 1913. Powell’s explicit characterization of the investigation as an attempt to compel interest rate decisions through “intimidation” frames the matter as a constitutional confrontation between the executive branch’s law enforcement authority and the Fed’s statutory mandate for independent monetary policy determination [3].

The situation illuminates tensions that have historically existed between political considerations and central bank autonomy, but never previously manifested through criminal investigation of a sitting Fed Chair. Historical precedent offers limited guidance for navigating this institutional crisis, as no previous Fed Chair has faced criminal prosecution or investigation during their tenure.

The investigation’s legal basis remains opaque, with the DOJ not publicly confirming the specific statutes under which Powell might be charged. The original congressional testimony regarding Fed headquarters renovations raises questions about potential false statements or obstruction allegations, though legal experts have noted the high bar for criminal prosecution of testimony-related matters given statutory protections for congressional witnesses [2][3].

The grand jury subpoena mechanism suggests the investigation has progressed beyond preliminary inquiry into an active evidentiary gathering phase. However, the path from subpoena to indictment remains uncertain, particularly given the constitutional questions surrounding prosecution of a sitting Fed Chair for conduct related to official duties.

The investigation’s proximity to Powell’s term expiration in May 2026 has prompted questions about strategic timing. An indictment before term expiration could complicate succession planning and potentially create a vacancy requiring immediate replacement. Alternatively, if the investigation extends beyond May, a new Fed Chair would assume leadership amid ongoing prosecutorial scrutiny of their predecessor—an unprecedented circumstance for the institution [7].

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: The investigation challenges foundational principles of Federal Reserve independence, potentially establishing precedents that could constrain future Fed Chairs’ willingness to resist political pressure. The erosion of institutional independence could affect long-term inflation expectations and market confidence in U.S. monetary policy frameworks [2][4].

: While markets have thus far exhibited resilience, continued developments—including potential indictment, congressional confrontation, or Fed policy responses—could trigger renewed volatility. The calm currently prevailing may prove fragile if legal proceedings escalate [5][6].

: Powell’s potential refusal to testify, while potentially justified by the investigation’s circumstances, could provoke congressional retaliation or demands for legislative restructuring of Fed oversight mechanisms. The 1978 Federal Reserve Act’s testimony requirements provide statutory grounding for congressional enforcement action [1].

: Whatever the investigation’s ultimate outcome, the mere initiation of criminal proceedings against a Fed Chair establishes a precedent that future administrations may invoke, potentially transforming the Fed Chair position into a political liability with legal exposure [3][4].

: The investigation’s controversial nature has created unusual alignment between Democrats defending institutional norms and Republicans expressing concerns about executive overreach. This alignment could facilitate bipartisan legislation strengthening Fed independence protections [7].

: The investigation has surfaced questions about the Fed Chair selection process and term structures that typically receive limited attention. A substantive reform debate could emerge, potentially leading to structural changes that insulate future Chairs from similar vulnerabilities.

: Foreign investors and central banks are monitoring U.S. institutional developments closely. Demonstrating resilience and constitutional constraint in the face of executive pressure could ultimately reinforce international confidence in U.S. financial governance frameworks [4].

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The Department of Justice has initiated a criminal investigation targeting Federal Reserve Chair Jerome Powell, serving grand jury subpoenas on January 9, 2026, related to his June 2025 congressional testimony about Fed headquarters renovations [2][3]. Powell characterizes the investigation as political pressure to lower interest rates, while DOJ officials have not publicly confirmed the specific legal basis for the probe [3]. Representative Bryan Steil indicates Powell is expected to skip February congressional testimony required by the 1978 Federal Reserve Act, though no formal Fed confirmation has been issued [1]. Republican lawmakers including House Financial Services Committee Chair French Hill have expressed concerns about the investigation, revealing intra-party divisions over the approach [7]. Markets initially declined but recovered, with investors apparently skeptical that the investigation will produce significant consequences [4][5][6]. Powell’s term expires in May 2026, adding timing complexity to the investigation’s trajectory [7].

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[0] Ginlix InfoFlow Analytical Database

[1] Bloomberg - Powell to Skip Testimony to Congress, Says Steil (https://www.bloomberg.com/news/videos/2026-01-14/powell-to-skip-testimony-to-congress-says-steil-video)

[2] ABC News - DOJ launches criminal investigation into Fed Chair Jerome Powell (https://abcnews.go.com/Politics/doj-launches-criminal-investigation-fed-chair-jerome-powell/story?id=129114228)

[3] Federal Reserve - Statement from Chair Jerome H. Powell (https://www.federalreserve.gov/newsevents/speech/powell20260111a.htm)

[4] Reuters - Stocks and Treasuries calm after Fed indictment jitters (https://www.reuters.com/business/finance/global-markets-global-markets-2026-01-12/)

[5] ABC News - Stock market shrugging off criminal probe into Fed Chair Powell (https://abcnews.go.com/Business/stock-market-shrugging-off-criminal-probe-fed-chair/story?id=129160781)

[6] The Motley Fool - Stock Market Investors Just Got Alarming News on Powell (https://www.fool.com/investing/2026/01/14/stock-market-investors-news-president-trump-powell/)

[7] POLITICO - GOP angst grows over Powell investigation (https://www.politico.com/live-updates/2026/01/12/congress/gop-angst-grows-powell-investigation-00721939)