US federal prosecutors have initiated a criminal investigation into Federal Reserve Chair Jerome Powell, a development he publicly confirmed on Sunday, January 11, 2026. The inquiry, approved by the U.S. Attorney's office in the District of Columbia, centers on Powell's congressional testimony regarding the multi-billion-dollar renovation of the Fed's Washington headquarters and allegations that he might have misled Congress about the project's scope and costs. Powell, whose term as chair is set to end in May, swiftly denounced the investigation as an "unprecedented action" and a "pretext" by the Trump administration. He asserted that the probe is a calculated effort to pressure the Federal Reserve into altering interest rate policies to align with the President's preferences, thereby undermining the central bank's crucial independence. This dramatic escalation in the ongoing tensions between the White House and the Fed has sparked widespread concern among financial markets and global policymakers. Following the news, the US dollar experienced a dip against major currencies, while safe-haven gold surged to a new record high, surpassing $4,600 an ounce, reflecting investor anxiety over the stability and autonomy of the world's most influential central bank. Global central bankers, including those from the European Central Bank and the Bank of England, have collectively issued statements expressing their "full solidarity" with Powell and emphasizing the paramount importance of central bank independence for global financial stability. Even some Republican lawmakers have voiced criticism, calling the Department of Justice's move ill-timed and questioning its motivations. President Trump has publicly denied direct involvement in the investigation, while simultaneously reiterating his long-standing criticism of Powell and the Fed's interest rate decisions. The incident adds another layer of complexity to the start of 2026, with significant implications for both domestic US policy and international financial markets.