Banking and Finance Law Daily Wrap Up, FEDERAL RESERVE SYSTEM—Raskin, Moskowitz lead Democrats demanding investigation about pursuit of Fed’s Powell, (Jan 16, 2026)
By Justin Marcus Smith, J.D.
House Judiciary Committee Democrats asked Committee Chair Jordan to begin an investigation because Federal Reserve independence is “foundational to American economic stability.”
U.S. Representative Jamie Raskin (D-Md.), Ranking Member of the House Judiciary Committee, and Rep. Jared Moskowitz (D-Fla.), are leading Committee Democrats in demanding answers about the apparent Department of Justice (DOJ) criminal investigation of Federal Reserve Board Chair Jerome Powell. Democratic members of the House Judiciary Committee directed a letter dated January 15, 2026, to Rep. Jim Jordan (R-Ohio), the House Judiciary Committee Chair, requesting that Jordan open an investigation into purported “blatant abuse of DOJ’s prosecutorial power.”
According to the Committee Democrats’ press release, the U.S. Attorney’s Office in the District of Columbia formally initiated a criminal inquiry into Chair Powell over renovations to the Federal Reserve Board’s historic building. In a statement released January 11, Powell said DOJ service of grand jury subpoenas and a threat of legal indictment about his June 2025 congressional testimony, in connection with renovations of Federal Reserve buildings, were “pretexts” for the Trump administration to exert further pressure on the Fed to cut interest rates.
Senators Elizabeth Warren (D-Mass.), Mark Warner (D-Va.), and Thom Tillis (R-N.C.) already condemned the Trump administration for threatening Fed independence. Sen. Tillis said he would oppose the confirmation of any nominee for the Fed, including for Powell’s replacement, “until this legal matter is fully resolved (see Banking and Finance Law Daily, Jan 12, 2026). The purported investigation of Powell, and the apparent threat to Fed independence, has caused consternation among many observers, including Wall Street.
Three demands. The January 15 letter specifically urges Jordan to use his authority as House Judiciary Committee Chair to do the following:
Invite or subpoena Attorney General Pam Bondi and relevant DOJ officials to testify publicly before the Committee.
Demand production of all documents and communications between DOJ and the White House about Chair Powell or the Federal Reserve from January 20, 2025, to the present.
Convene a public hearing to examine the circumstances of the DOJ investigation of Powell and implications for the independence of the Federal Reserve.
The letter challenges Jordan, in light of his experience as former Chair of the Select Subcommittee on the Weaponization of the Federal Government, to recognize the urgent importance of congressional oversight that the DOJ is not being used to coerce the Fed to lower interest rates ahead of the 2026 midterm elections.
The legislators contend that Federal Reserve independence is “foundational to American economic stability.” They suggest the result of pressuring the Fed to alter interest rates will be “inflation, instability, increased unemployment, decreased growth, and the erosion of public trust in financial institutions.” They state that, although Presidents of both parties have sometimes criticized Federal Reserve policy, none until now had ever engaged in the kind of sustained pressure that President Trump has placed on Chair Powell. Trump threatened to “fire” Powell, and, on Dec. 29, 2025, expressed a possibility of legal action against him.
The lawmakers reminded Jordan of earlier Trump attempts to fire Fed Governor Lisa Cook based on allegations of mortgage fraud. They said the current DOJ investigation into Powell makes it appear that the DOJ has become a “cudgel” to pressure the Fed to adopt the President’s “preferred monetary policies” in a “dangerous corruption of both institutions.”
The Representatives lauded Powell for pledging not to bow to threats. They concluded their letter stating “the American people deserve to know” who authorized the DOJ investigation of Powell and whether any White House officials communicated with the DOJ about Powell before the DOJ began its investigation of Powell.
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