Breaking: Jerome Powell Faces DOJ Criminal Investigation—Fed Chair Under Fire

Federal Reserve Chairman Jerome Powell has been formally referred for criminal investigation by the Department of Justice—sending shockwaves through Wall Street.

### The Hammer Drops on Powell

Sources confirm the DOJ is probing potential misconduct tied to Powell’s tenure, though specifics remain under wraps. The timing couldn’t be worse—just as markets reel from another volatile quarter.

### Markets Brace for Fallout

Traders are already pricing in chaos, with crypto and equities likely to face turbulence. Bitcoin maximalists are, predictably, smug about the fiat system’s latest drama.

### A Fed in Crisis?

If Powell goes down, expect a power vacuum—and more flip-flopping on rate policies. Perfect for an economy that thrives on uncertainty, right?

Closing thought: Maybe decentralized finance wouldn’t need a bailout… just saying.

Legal stakes are rising

The criminal referral escalates the tension between Powell and President Donald Trump, who had urged a considerable interest rate reduction numerous times. Recently, TRUMP advised the Federal Open Market Committee to reduce rates by 300 basis points.

These trends in the current market anticipate a 56.1% possibility of the Fed cutting interest rates during its September meeting this week. Analysts say that this has boosted expectations.

Although Trump has pondered the possibility of firing Powell, he has told news outlets there is no such possibility. But he said the heightened scrutiny might prompt Powell to resign, should any legal or reputation pressure come to bear.

The referral further reinforces the criticism Trump has constantly issued concerning Powell’s unwillingness to be aggressive in monetary policy. Powell could face up to five years in prison and financial penalties if found guilty of perjury. The Department of Justice has not yet responded to the referral, and no official charges have been filed.

White House denies influence from the Treasury Secretary

Reports from the Wall Street Journal suggested that Treasury Secretary Scott Bessent played a role in convincing Trump not to dismiss Powell. However, Trump publicly denied any such influence in a social media post on Sunday.

“Nobody had to explain that to me,” Trump wrote. “I know better than anybody what’s good for the Market, and what’s good for the U.S.A.”

In an interview with CNBC, Bessent did not entirely push the account recorded by the Journal but reiterated that Trump seeks many people’s opinions before making decisions. “ The president draws advice from a wide range of allies and advisors,” he said. According to the report, Bessent had cautioned Trump that dismissing Powell WOULD provoke lawsuits and a meltdown in the financial markets.

“What we need to do is examine the entire Federal Reserve institution and whether they have been successful.”

Bessett

Recently, Trump called Powell a “numbskull” and accused him of “making it difficult for people, especially the young, to buy a house.” The US president accused Powell of preventing the Federal Reserve from lowering interest rates to make housing more affordable. Powell took office in 2018 following Trump’s nomination of him as his successor to Janet Yellen in his first term as president.

KEY Difference Wire helps crypto brands break through and dominate headlines fast