The subpoenas threatened a criminal indictment related to Jerome Powell's testimony before the Senate Banking Committee in June 2025, according to the Fed chair.

Treasury Secretary Scott Bessent reveals Trump has one final interview before naming the next Federal Reserve chair, with decision expected by month's end.

U.S. futures slipped but markets in Asia advanced Monday after Federal Reserve Chair Jerome Powell said the Department of Justice had served the central bank with subpoenas. The threat of a criminal indictment over Powell’s testimony about the Fed’s building renovations is the latest escalation in President Donald Trump’s feud with the Fed.

Tension between the White House and the U.S. central bank sharply escalated over the weekend, with U.S. Federal Reserve Chair Jerome Powell saying the administration had threatened him with a criminal indictment related to the Fed headquarters renovation.

No one, certainly not the chair of the Federal Reserve, is above the law, but this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said.

Looking ahead to 2026, the Fed’s own median projection or “dot plot” suggested there would be only one additional 25 basis points cut. This would move the rate to around 3.25% to 3.50% by year end. Market expectations are slightly more dovish, calling for two rate cuts, which would push rates closer to 3%.

Two Federal Reserve officials on Friday expressed some skepticism that a Trump administration plan to lower housing costs by buying billions in mortgage-backed bonds will do much to lift the troubled sector.

Bond yields look like to rise this year, despite the possibility of at least two Federal Reserve rate cuts. Even a small increase in yields can be a problem.