Jerome Powell Faces DOJ Referral Over Perjury Allegations Amid Fed Rate Cut Pressure

• Fed Chair Jerome Powell has been referred to the DOJ by Rep. Anna Paulina Luna for allegedly lying under oath.

• The accusations involve false claims about the cost and scope of Federal Reserve building renovations.

• Trump is pushing for a major rate cut, and markets are watching closely as Powell’s position comes under pressure.

Federal Reserve Chair Jerome Powell may face a criminal investigation after U.S. Representative Anna Paulina Luna referred him to the Department of Justice. The lawmaker, a known ally of President Donald Trump, accuses Powell of lying under oath during testimony about the Federal Reserve’s Eccles Building renovations.

According to FOX News, Luna’s referral letter outlines two specific claims. The first concerns Powell’s June 25 testimony before the U.S. Senate Committee on Banking. Luna alleges the Fed Chair made materially false statements regarding the scope and cost of the renovation project.

The second accusation involves a letter Powell sent to Office of Management and Budget Director Russell Vought. In that letter, Powell reportedly referred to cost changes, from $1.9 billion to $2.5 billion, as “minor,” a claim Luna disputes based on documents reviewed by congressional investigators. These records suggest the changes were significant and not accurately characterized.

Trump Pushes for Aggressive Rate Cut Amid Legal Scrutiny

These developments arrive as President Trump intensifies his campaign for a major Fed rate cut. Trump has called for a 300-basis-point reduction, citing low inflation and the need to stimulate the economy. Despite public criticism of Powell’s monetary policy decisions, Trump has indicated he does not intend to fire the Fed Chair, though the ongoing allegations may alter Powell’s position.

Perjury charges, if proven, could lead to up to five years in prison and financial penalties. While it is still unclear whether the DOJ will pursue an investigation, the accusations have fueled uncertainty about Powell’s leadership ahead of the July 30 Federal Open Market Committee (FOMC) meeting.

Rate Cut Odds Shift as FOMC Meeting Approaches

Market sentiment has quickly responded to the growing controversy. According to CME FedWatch data, the probability of a rate cut in September has climbed to 56.1%. However, no changes are expected in the upcoming July meeting, as U.S. labor market data from June showed strong performance. Current odds suggest a 97.4% chance that rates will remain unchanged this month.

Crypto traders, macro investors, and gaming-savvy speculators closely watch the Fed’s next move. A shift in interest rates could trigger market-wide volatility and affect capital flows into risk assets like Bitcoin and Ethereum.