Former Fed Leaders Slam Criminal Probe Against Jerome Powell

Tue Jan 13 2026 22:31:16 GMT+0200 (Eastern European Standard Time)

Major economic figures, including former Fed chairs Janet Yellen and Alan Greenspan, defend Jerome Powell against a controversial criminal investigation perceived as a threat to the Fed's independence.

Three former heads of the U.S. Federal Reserve, alongside ten other economists, voiced strong criticism of a criminal investigation into Jerome Powell, asserting it undermines the institution's independence. The challenge follows a year of public pressure from President Trump and highlights concerns about monetary policy interference. As Powell labeled the investigation as 'unprecedented,' reactions across political lines suggest concerns regarding the implications for future Fed operations.

Three former heads of the US central bank on Monday strongly criticised a criminal investigation into chair Jerome Powell, describing it as a bid to undermine the Federal Reserve's independence.

In a statement, Janet Yellen, Ben Bernanke and Alan Greenspan, along with 10 other eminent former officials, rallied behind Powell.

This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly, the former officials wrote.

They emphasized that it has no place in the United States, which boasts a strong rule of law foundational to its economic success.

The Department of Justice (DoJ)'s probe follows a year of repeated attacks on Powell by President Donald Trump, who has publicly urged for lower interest rates. Powell disclosed the investigation via an unscheduled video statement, describing it as 'unprecedented' and likely driven by Trump's frustrations. He suggested the probe aimed at influencing his position rather than addressing legitimate concerns.

Yellen, who is concerned about the ramifications of such political pressures, warned of a 'chilling' environment for economic policy-making. The backlash has attracted bipartisan condemnation, with some lawmakers expressing worries about the probe distracting from crucial financial decisions.

The potential impact of this investigation, along with Trump's quest to appoint a new Federal Reserve Chair, may reshape the landscape of U.S. monetary policy.