Yeliz Akmaca 
U.S. Representative Anna Paulina Luna has officially referred Federal Reserve Chair Jerome Powell to the Department of Justice, accusing him of perjury. Luna claims Powell made false statements under oath regarding the Federal Reserve’s Eccles Building renovation project. This development comes as Donald Trump ramps up pressure on Powell, reinforcing his calls for interest rate cuts.
The accusations center around two key points. First, during his June 25 testimony before the Senate Banking Committee, Powell claimed the renovation included no luxury features. However, project documents revealed elements like marble finishes, private dining areas, terrace gardens, and VIP elevators. Secondly, in an official letter to Vought, Powell presented a $600 million cost increase as a minor adjustment, but Congressional records show significant project impacts.
Perjury Allegations: Powell Faces Up to 5 Years in Prison
Luna stated that Powell provided false information in two separate sworn statements — a serious offense under U.S. law. Perjury can result in up to five years in prison and fines. Such charges could also damage a public official’s reputation and potentially lead to removal from office.
Trump continues to escalate his pressure on Powell. He is urging the Federal Open Market Committee (FOMC) to implement a 300-basis-point interest rate cut, arguing that inflation has declined and rate cuts are overdue. Trump has even floated the idea of removing Powell from office, though insiders say he may avoid taking that step directly. Still, if fraud allegations gain traction, Powell might be forced to resign.
Markets are closely watching the situation. As of now, the probability of a Fed rate cut in September has risen to 56.1%. However, the July 30 FOMC meeting is expected to leave rates unchanged, with CME FedWatch data showing a 97.4% likelihood of holding steady — largely due to strong June employment figures.
Fed Under Political Pressure: Are Economic Decisions at Risk?
Powell’s legal troubles represent more than a personal issue — they challenge the independence of the entire Federal Reserve. Luna’s referral isn’t merely about project details; observers interpret it as a sign of mounting political pressure.
The key concern now is whether the Fed will base future rate decisions on market data or yield to political influence. Trump’s statements and Luna’s move underscore the intensifying political spotlight on Powell and the central bank.
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