• Rep. Anna Paulina Luna accuses Jerome Powell of perjury regarding Fed headquarters renovation costs.
  • The project's budget ballooned from $1.9B to $2.5B, with allegations of misleading statements about lavish amenities.
  • The unprecedented move escalates political tensions around Fed independence amid inflation battles.

Powell Faces Unprecedented Legal Threat

Federal Reserve Chair Jerome Powell finds himself in uncharted territory after Rep. Anna Paulina Luna (R-FL), a prominent Trump ally, filed a criminal referral with the Justice Department alleging perjury. The complaint stems from Powell's testimony about the controversial renovation of the Eccles Building, the Fed's Washington headquarters, where costs spiraled 32% beyond initial estimates.

Congressional investigators claim Powell downplayed both the scale of budget overruns and the inclusion of high-end features in the renovation during his Senate Banking Committee appearance. "The Chair's statements don't align with the documentation we've reviewed," said a House staffer familiar with the probe, speaking on condition of anonymity. The Fed maintains Powell testified truthfully and that all renovations followed proper protocols.

Political Storm Around Central Bank Independence

The referral lands as Powell's Fed navigates its most challenging policy environment in decades, with inflation still above target despite aggressive rate hikes. Some lawmakers see the renovation controversy as emblematic of broader concerns about Fed accountability. "When Americans are struggling with high prices, $600 million in unplanned spending demands answers," Luna stated in her referral letter obtained by reporters.

Market reaction remained muted, with the S&P 500 showing little movement following the news. However, policy analysts warn the development could have longer-term consequences. "This represents a dangerous blurring of lines between monetary policy and political score-settling," noted Georgetown University's Sarah Binder, an expert on Fed-Congress relations. The DOJ hasn't indicated whether it will pursue the matter - prosecuting a sitting Fed chair would be without modern precedent.

[The Federal Reserve declined to comment on the referral, referring questions to its previous statements about the renovation project being essential for seismic safety and technological upgrades.]