Federal Reserve Chair Jerome Powell is under a criminal investigation for alleged false statements to Congress regarding the Fed's headquarters renovation. In a rare video message, Powell disputed the investigation's motivations, calling it "unprecedented." This probe coincides with a pivotal Supreme Court case that will determine if President Trump can fire Fed Governor Lisa Cook, a move that challenges the central bank's century-long tradition of independence.
The Supreme Court case, with oral arguments scheduled for January 21, 2026, tests the limits of presidential power over the Federal Reserve. Cook was appointed by President Biden in 2023 to a 14-year term. Trump fired her in August 2025, citing alleged mortgage fraud from before her tenure, but a lower court blocked the removal. The legal core is whether a president can remove a Fed governor for pre-office conduct, which Cook's lawyers argue would gut the "for cause" protection and make governors at-will employees.
Powell's decision to attend the Supreme Court hearing is a highly symbolic act, underscoring the institution's view that the case is existential for its independence. His presence follows the disclosure that the Trump administration has issued subpoenas to the Fed, directly threatening Powell with an unprecedented criminal investigation. Experts warn that if the Court permits Cook's removal, Powell's own vulnerability increases substantially.
While the news has sparked concerns in broader financial markets, leading to a noted rise in gold prices, no direct or substantial impact on the cryptocurrency sector, including Bitcoin or Ethereum, has been identified. The focus remains on potential long-term implications for U.S. financial governance, monetary policy stability, and institutional accountability.
