Federal Reserve Chair Powell Faces Perjury Referral Over Eccles Building Renovation

Federal Reserve Chairman Jerome Powell has been referred to the Department of Justice (DOJ) by Congresswoman Anna Paulina Luna for alleged perjury related to his testimony regarding the renovation of the Federal Reserve’s Eccles Building. The referral, sent in a letter to the DOJ, accuses Powell of making materially false claims during his testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs. Specifically, Luna alleges that Powell denied the existence of several luxury amenities in the renovation project, including a VIP dining room, new marble finishes, special elevators, water features, and a roof terrace garden. These claims are contradicted by documents reviewed by congressional investigators, which indicate that the project's scope and cost overruns were significant.

The renovation project, initially estimated at $1.9 billion, has escalated to $2.5 billion. Powell had characterized the changes that led to this cost increase as minor, a claim that Luna disputes based on the project's actual plans. The Florida Republican also accused Powell of misrepresenting the state of maintenance of the Eccles Building, further complicating the allegations against him.

This referral comes at a time when Powell is already under significant pressure from the Trump administration. President Donald Trump has previously called for Powell's resignation, citing dissatisfaction with the Fed's interest rate policies. The president has also drafted a letter to fire Powell, although he has stated that he has no immediate plans to do so. The criminal charges Powell is now facing could exacerbate the mounting pressure on him and potentially influence his future as the Fed chair.

If found guilty, Powell could face up to five years in prison and substantial fines. The allegations of perjury not only jeopardize his personal legal standing but also cast a shadow over his leadership of the Federal Reserve. The outcome of the DOJ's investigation will be closely watched, as it could have significant implications for the Fed's leadership and its policies.

Market reaction has been cautious as the event is unprecedented for a sitting Fed chair. Financial experts note that while there is no direct link to volatile crypto market events, such controversies can affect sentiment. Price stability of major cryptocurrencies like BTC and ETH remains unaffected for now.

History shows political attacks on central bank independence often result in market jitters. These rarely cause immediate drastic shifts in crypto asset flows unless compounded by obvious policy adjustments. Experts are watching for any indications of changes in Fed policy or leadership that could impact global markets.

Potential outcomes could include regulatory changes that affect crypto markets. However, existing data and industry insights suggest no immediate shifts. Analysts recommend observing developments closely due to potential broader financial and regulatory impacts.