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The investigation, which centers on renovations of the Federal Reserve’s headquarters in Washington, signals an escalation in the long-running clash between President Trump and the chair.

President Trump, left, and the Federal Reserve chair, Jerome Powell, right, touring the renovation site at the central bank’s headquarters in Washington in July.Credit...Haiyun Jiang/The New York Times

Jan. 11, 2026, 7:04 p.m. ET

The U.S. attorney’s office in the District of Columbia has opened a criminal investigation into Jerome H. Powell, the Federal Reserve chair, over the central bank’s renovation of its Washington headquarters and whether Mr. Powell lied to Congress about the scope of the project, according to officials briefed on the situation.

The inquiry, which includes an analysis of Mr. Powell’s public statements and an examination of spending records, was approved in November by Jeanine Pirro, a longtime ally of President Trump who was appointed to run the office last year, the officials said.

The investigation represents the opening of a major new legal front against Mr. Powell, whom Mr. Trump has continually attacked for resisting his demands to slash interest rates significantly. The president has threatened to fire the Fed chair — even though he nominated Mr. Powell for the position in 2017 — and raised the prospect of a lawsuit against him related to the $2.5 billion renovation, citing “incompetence.”

Mr. Trump told The New York Times in an interview last week that he had decided on who he wants to replace Mr. Powell as Fed chair. He is expected to soon announce his decision. Kevin A. Hassett, Mr. Trump’s top economic adviser, is a front-runner for the top job. While Mr. Powell’s term as chair ends in May, his term as a governor runs through January 2028. Mr. Powell has not disclosed whether he plans to stay on at the central bank beyond this year.

The Fed declined to immediately comment. A Justice Department spokesman did not respond to a request for comment.

The U.S. attorney’s investigation into Mr. Powell underscores Mr. Trump’s larger clash with the Fed. Other broadsides have included an effort to oust Lisa D. Cook, a governor at the central bank whom Mr. Trump tried to fire over allegations of mortgage fraud. Presidents are able to remove officials at the Fed only for “cause,” which has typically meant malfeasance or a dereliction of duty. The Supreme Court will hear arguments for Ms. Cook’s case on Jan. 21.

Congress granted the Fed the authority to set interest rates free of meddling from presidents, whose political fortunes are often tethered to how the economy is faring. Rather, lawmakers stipulated that the central bank should pursue low, stable inflation and a healthy labor market.

It is not clear whether Ms. Pirro has convened a grand jury or issued subpoenas. But prosecutors in her office have contacted Mr. Powell’s staff multiple times to request documents about the renovation project, according to an official with knowledge of the investigation who discussed an open inquiry on the condition of anonymity.

Starting an investigation is one thing, presenting sufficient evidence to secure an indictment from a federal grand jury — or making it stick — is another.

Indictments against two of Mr. Trump’s top targets, the former F.B.I. director James B. Comey and Letitia James, the New York attorney general, were thrown out in November by a federal judge. An investigation into Senator Adam B. Schiff, Democrat of California, has yet to yield enough evidence to present to a grand jury.

The renovations at the center of the investigation into Mr. Powell broke ground in 2022 and are set to be completed in 2027. They are estimated to be about $700 million over budget. The project involves expanding and modernizing the Marriner S. Eccles Building and another building on Constitution Avenue, which date to the 1930s.

The Fed has said that neither of those buildings has been “comprehensively renovated” since their construction nearly 100 years ago, suggesting they were in need of a significant overhaul. Part of the project includes removing asbestos and lead contamination as well as making the facilities compliant with laws related to accessibility for people with disabilities.

A 2021 version of the Fed’s proposal described private elevators and dining rooms for top policymakers, water fountains and new marble features, in addition to a rooftop terrace for staff. Pressed at a congressional hearing in June, Mr. Powell denied that many of those features were part of the latest proposal.

“There’s no V.I.P. dining room; there’s no new marble,” he said. “We took down the old marble, we’re putting it back up. We’ll have to use new marble where some of the old marble broke. But there’s no special elevators. There’s just old elevators that have been there.”

Mr. Powell added that the project’s plans had “continued to evolve” and that some features that had been initially incorporated were scrapped.

After Mr. Powell’s testimony, the Fed published a “Frequently Asked Questions” post on its website that reaffirmed Mr. Powell’s answers to lawmakers. The central bank continued to share additional details, including a virtual tour as well as photographs and annotations to the 2021 proposal that prompted the criticism.

In explaining the cost overruns, the central bank cited expenses tied to materials, equipment and labor as well as unforeseen circumstances, such as more asbestos than anticipated and soil contamination.

Glenn Thrush covers the Department of Justice for The Times and has also written about gun violence, civil rights and conditions in the country’s jails and prisons.

Colby Smith covers the Federal Reserve and the U.S. economy for The Times.

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