BREAKING: Federal prosectors in Washington, D.C. have opened a criminal investigation into Federal Reserve chair Jerome Powell, escalating Trump’s effort to punish an independent central bank for refusing to bend to his political demands. The probe was approved by Trump stooge Jeanine Pirro, raising major alarm bells

Federal Prosecutors Are Said to Have Opened Inquiry Into Fed Chair Powell
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.

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.