Fed Chair Powell Faces Criminal Referral Over Alleged False Testimony

Federal Reserve Chair Jerome Powell has been referred to the Department of Justice for criminal investigation following allegations of false testimony before the Senate Banking Committee. Representative Luna's letter cites material discrepancies in Powell's statements regarding the $600 million renovation costs, claiming internal documents contradict his characterization of the changes as minor.

The escalating legal scrutiny intensifies tensions between the Fed and the TRUMP administration, which has repeatedly pushed for aggressive rate cuts. Market expectations now price in a 56.1% probability of a September rate cut, with analysts noting the political pressure has heightened volatility across risk assets.

While President Trump has denied plans to dismiss Powell, the criminal referral amplifies existing criticisms of Fed independence. The situation bears watching for crypto markets, as institutional uncertainty traditionally drives capital toward decentralized alternatives during periods of macroeconomic instability.