Federal Reserve Chair Faces Legal Trouble: $2.5 Billion Renovation Project Overruns Spark Perjury Investigation

U.S. federal prosecutors have launched a significant criminal investigation into Federal Reserve Chair Jerome Powell. The probe centers around the renovation project at the Fed’s Washington headquarters, with key questions about whether Powell committed perjury before Congress regarding the project’s scope. The investigation was authorized by District of Columbia Prosecutor Jeanine Pirro in November 2025 and has been ongoing for over two months. This development not only poses personal legal risks for Fed leadership but could also cause turbulence in financial and cryptocurrency markets.

Core Allegations of the Investigation

Perjury Suspicion

Powell denied during a congressional hearing that the Fed’s renovation included luxury features such as private elevators and marble decorations, claiming that some functionalities had been cut as the project evolved. However, prosecutors are reviewing his public statements and expenditure records to determine whether these claims are consistent with actual facts. If perjury is confirmed, it would pose a serious challenge to his position as Fed Chair.

Actual Scope of the Project

According to breaking news, the original budget for the renovation was approximately $2.5 billion, with current estimates indicating an overrun of $700 million, bringing the total cost potentially to $3.2 billion. This substantial expenditure has raised questions from Congress and the public amid tight budget constraints.

Why This Matters

Impact on the Fed’s Credibility

As the central institution of the U.S. financial system, the integrity of the Fed’s leadership is crucial for market confidence. Any false statements made by the Fed Chair during congressional testimony could severely damage the institution’s credibility. Especially in the current economic environment, market trust in Fed policies is already under multiple tests.

Concerns Over Policy Continuity

The criminal investigation could affect Powell’s ability to perform his duties and his decision-making authority. The Fed’s monetary policy decisions directly influence global financial markets, including the cryptocurrency sector. Any doubts about the stability of Fed leadership could trigger market volatility.

Potential Market Impact

Based on historical experience, major scandals within the Fed often trigger several market reactions:

• In the short term, risk assets (including cryptocurrencies) may face selling pressure as investors seek safer assets
• The U.S. dollar might fluctuate due to concerns over Fed policy stability
• Markets may preemptively adjust expectations regarding future Fed policy stances
• Cryptocurrency markets, being highly sensitive to Fed policy signals, could react more sharply

Follow-up Focus

The progress of the investigation will depend on the evidence collected by prosecutors. Key questions include:

• Whether direct contradictions between expenditure records and Powell’s public statements can be established
• Whether the investigation will expand to other senior Fed officials
• Whether Powell’s position will face substantial threats
• When the investigation’s findings will be made public

Summary

This criminal investigation into Fed Chair Powell reflects strict oversight over government transparency and leadership integrity. Regardless of the final outcome, the event serves as a reminder for market participants to monitor the stability of Fed policies. For the crypto market, any changes in Fed policy could trigger chain reactions. Investors should closely follow the investigation’s developments and pay attention to statements from other Fed officials to assess whether policy continuity might be affected.