Federal Reserve Chairman Jerome Powell is facing unprecedented scrutiny focused squarely on his sworn testimony to Congress.

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At the heart of the Justice Department criminal investigation is whether Powell misled lawmakers about a $2.5 billion renovation of the Fed’s Washington headquarters — testimony that has now triggered allegations of perjury and a rare grand jury probe of a sitting central bank chief.

At issue is whether Powell perjured himself when he answered questions about the scope, cost and features of the project, Business Insider reports.

During a hearing before the Senate Banking Committee in June, Powell faced tough questioning from Sen. Tim Scott, R-S.C., over the multi-billion-dollar renovation of the historic Marriner S. Eccles Building and adjacent Federal Reserve facilities.

The project’s cost had ballooned far beyond initial estimates, drawing ire from lawmakers.

“It sends the wrong message to spend public money on luxury upgrades that feel more like they belong in the Palace of Versailles than a public institution,” Scott said during the hearing.

Under oath, Powell denied that the renovation included many of the lavish features cited in earlier planning documents.

Specifically, Powell testified, the renovations were restricted from covering lavish appointments. Thus, the Fed renovations called for:

• No VIP dining room
• No special elevators beyond the existing ones
• No rooftop terrace gardens
• No new water features
• No new marble beyond replacement

“I would just point to it — there’s no VIP dining room,” Powell told the committee, adding that other claims were “flatly misleading.”

He also said the project had “continued to evolve,” and that some elements that once appeared in planning materials had since been removed by the time of his testimony.

Shortly after the hearing, Rep. Anna Paulina Luna, R-Florida, accused Powell of making false statements to Congress. In a criminal referral to Attorney General Pam Bondi, she highlighted two specific assertions.

First, Luna said Powell’s claim that there were no luxury features appeared to contradict earlier Fed planning documents submitted to the National Capital Planning Commission that described rooftop gardens, private dining spaces, upgraded elevators and decorative water features — elements Luna says were real parts of the project at one stage.

Second, she challenged Powell’s remark that the Eccles building had “never had a serious renovation,” as records show a comprehensive overhaul from 1999–2003, including major system upgrades and interior refurbishing.

Luna alleged Powell’s statements contradicted official project plans and federal submissions, and that these discrepancies could amount to perjury and false statements under federal law.

On January 9 2026, the Justice Department served grand jury subpoenas to the Federal Reserve — an unusual step in probing a sitting Fed chair — and threatened a possible criminal indictment tied to Powell’s testimony.

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Powell has publicly described the investigation as “unprecedented” and politically motivated, asserting the subpoenas are a pretext tied to broader pressure from the Trump administration over interest-rate policy.

Officials from the U.S. Attorney’s Office have said subpoenas were necessary after repeated attempts to discuss cost overruns and testimony went unanswered, and they expect Powell’s cooperation.

The probe has ignited a political firestorm.

Some Republicans defend the investigation as proper oversight. Others, as well as several former Fed chairs, warn it threatens central bank independence.

U.S. President Donald Trump has openly criticized Powell over rate policy and building costs, though he denies direct involvement in the DOJ action.

The link to the Federal Reserve May 2021 document on planned renovations and expansion can be viewed here.