Here's what smart people in economics and business are saying about the DOJ's Fed probe

• Fed Chair Jerome Powell said the central bank has received grand jury subpoenas from the Justice Department.
• Economists, business leaders, and analysts are weighing the implications of the development.
• All three living former Fed chairs criticized the move in a joint statement.

Federal Reserve Chair Jerome Powell said late Sunday that the central bank had received grand jury subpoenas from the Department of Justice. He described the move as a part of an effort to pressure the central bank on monetary policy.

"No one — certainly not the chair of the Federal Reserve — is above the law," Powell said. "But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure."

Prominent economists and business leaders — including some of the most respected figures in global economics and monetary policy —are reacting as the news hit markets at the start of the trading week.

They have weighed in on the unprecedented DOJ move and how it affects the Fed's independence, with some suggesting it could ultimately undermine the Fed's credibility.

Here's what leaders in economics, business, and politics are saying:

The world's top central bankers

A group of the most senior central bankers in the world rallied around Powell on Tuesday, sharing a joint statement in support of the Fed chair.

"We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell," the statement said.

"The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve. It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability.

"Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest. To us, he is a respected colleague who is held in the highest regard by all who have worked with him."

The statement was signed by Christine Lagarde, head of the European Central Bank, and Andrew Bailey, the Bank of England chief, as well as central bank bosses from Sweden, Denmark, Switzerland, Australia, Canada, South Korea, and Brazil, alongside the chair and general managers of the Bank for International Settlements.

3 ex-Fed chairs and 5 former Treasury secretaries shared a joint critique

On Monday, thirteen leading economic figures in the US released a joint statement titled "Statement on the Federal Reserve," to condemn the Justice Department's actions.

"The Federal Reserve's independence and the public's perception of that independence are critical for economic performance," the signatories, who included all three living former Federal Reserve chairs, said.

"The reported criminal inquiry into Federal Reserve chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence."

They compared the Justice Department's actions to how monetary policy is made in emerging markets with weak institutions, warning that it could lead to inflation.

"It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success," the signatories said.

The signatories included the three living former Federal Reserve chairs — Alan Greenspan, Ben Bernanke, and Janet Yellen — as well as five ex-Treasury Secretaries — Yellen, Robert Rubin, Henry Paulson, Timothy Geithner, and Jacob Lew.

Eight former chairs of the Council of Economic Advisers, which advises the president on economic policy, and an ex-chief economist at the International Monetary Fund, also signed the statement.

Collectively, the signatories have worked under the administrations of eight presidents, dating back as far as Gerald Ford in the 1970s.

Janet Yellen

Janet Yellen, President Joe Biden's Treasury Secretary and the Federal Reserve Chair prior to Jerome Powell, separately described the Justice Department's investigation as "extremely chilling" and said it compromises the central bank's independence, CNBC reported.

Yellen, who served as Fed chair from 2014 to 2018, defended her successor, saying: "Knowing Powell as well as I do, the odds that he would have lied are zero, so I do believe they're going after him because they want his seat and want him gone."

"I'm surprised the market isn't more concerned. It seems to me that the market should be concerned," Yellen said.

Sen. Thom Tillis

On Sunday, the North Carolina Republican said he would oppose nominees for the Fed.

"If there were any remaining doubt about whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none," Tillis said in a statement.

Sen. Lisa Murkowski

The Republican Senator from Alaska said Monday that, "After speaking with Chair Powell this morning, it's clear the administration's investigation is nothing more than an attempt at coercion."

She added, "If the Department of Justice believes an investigation into Chair Powell is warranted based on project cost overruns —which are not unusual — then Congress needs to investigate the Department of Justice." Murkowski said that Tillis is right to block any Federal Reserve chair nominees from the Trump administration.

Rep. French Hill

Hill, a Republican member of Congress in Arkansas, said Monday that he "knows Mr. Powell to be a man of integrity."

Rep. French Hill, a Republican from Arkansas, said the criminal investigation "creates an unnecessary distraction."

Hill, who leads the powerful House Financial Services committee, said the criminal investigation "creates an unnecessary distraction."

Mohamed El-Erian

Prominent economist Mohamed El-Erian called for Powell's resignation months ago to protect the Fed's independence amid the feud with Trump.

On Sunday, El-Erian wrote on X that the inquiry into Powell is damaging for the US central bank.

"For those of us who value the operational autonomy of central banks, the risk is that this situation could expose deeper issues — further undermining the credibility of a Fed whose public standing is already fragile," wrote El-Erian, who is a former co-chief investment officer at Pimco.

Lloyd Blankfein

Former Goldman Sachs CEO Lloyd Blankfein said the episode "feels like an attempt at murder-suicide."

"Trying to kill the Fed's independence by criminal investigation is not good for that institution, and maybe even worse for the Justice Department," Blankfein wrote on X.

Reid Hoffman

LinkedIn cofounder Reid Hoffman raised concerns about the Fed's independence.

"Question to all those who said Trump would be better for the economy: is attacking the Fed's independence what you had in mind?" wrote the prominent Democratic donor on X.

Peter Schiff

Peter Schiff, the chief economist at Euro Pacific Asset Management, attributed the gold price surge to fresh record highs on Sunday evening to the investigation into Powell.

"I am not a fan of Powell, but I agree with him on Trump's motivation," Schiff, whose firm managed $1.4 billion last year, wrote on X.

In April, Schiff said Trump's next Fed Chair pick would be a "loyal soldier."

Michael A. Gayed

Michael A. Gayed, a renowned investment manager, said direct action against a sitting Fed Chair is "without modern precedent," in an edition of his Lead-Lag substack report published on Sunday evening.

The inquiry into Powell raises questions about whether the long-standing boundaries between fiscal power, prosecutorial authority, and monetary independence are beginning to blur, Gayed said. The concern was less about any single case and more about the future precedent it may establish.

"Should investors conclude that future Fed officials could face legal consequences for policy decisions that conflict with political priorities, the incentive structure governing monetary policy could change," said Gayed.

That shift could increase inflation risk premiums and weaken confidence in long-duration financial assets tied to stable policy expectations, he added.

Victoria Greene

Victoria Greene, the chief investment officer at G Squared Private Wealth, told CNBC in an interview on Monday that her firm is advising its clients to remain relaxed and avoid knee-jerk reactions to headlines.

"See how this plays out. It could be a little bit of a dip buying opportunity, we see multiple 5-10% pullbacks here," said Greene.

"FED independence is something we're going to have to watch, especially what happens with bond yields," she added.

Jim Reid

Jim Reid, Deutsche Bank's global head of macro research, said in a morning note on Monday that Powell "made it clear that he views the move as one aimed at influencing Fed independence."

Reid called the development "remarkable stuff," adding that there would be "plenty of opportunities for big headlines over the coming days. "

Anthony Scaramucci

Anthony Scaramucci, a prominent investor and political commentator, criticised the Justice Department's subpoenas in a post on X.

"So future potential fed chairs just remember if you don't do what Trump wants he will criminally prosecute you," he said.

Scaramucci served as White House communications director for eleven days during the first Trump administration but has since become a vocal critic of the president.

Jan Hatzius

Jan Hatzius, Goldman Sachs' chief economist, said on Monday that the subpoenas will likely exacerbate worries about the Fed's independence, according to Reuters.

"Obviously, there are more concerns that Fed independence is going to be under the gun, with the latest news on the criminal investigation into Chair Powell really having reinforced those concerns," Hatzius said at the bank's annual global strategy conference.

However, Hatzius said he is confident that Powell will continue to "make decisions based on the economic data and not be influenced one way or the other."

Lawrence H. White

Lawrence H. White, a professor of economics at George Mason University and a monetary theorist, posted his thoughts on X.

White, a well-known critic of central banking policy, said, "Trump has brought so much chaos that he has me rooting for a central banker. Me!"

Sharmin Mossavar-Rahmani

Sharmin Mossavar-Rahmani, the chief investment officer of the Investment Strategy Group of Goldman Sachs Wealth Management, responded to concerns about Fed independence during the bank's 2026 investment outlook.

"Do we think Fed independence is threatened? No, that's why we don't actually have it as a risk," she said.

Mossavar-Rahmani said that legal experts believed the Supreme Court would soon declare that the president does not have the authority to terminate Fed officials.

"The Fed is uniquely different because of what it does, and its independence, and how they impact the government. So they should not be taken in the same vein as all the other agencies," Mossavar-Rahmani said.

She added that she did not believe Trump wanted to jeopardize the general direction of rates.

Russ Mould

Russ Mould, investment director at the UK investment firm AJ Bell, said that the Justice Department's investigation is "in keeping with what looks like a policy to get the US economy to run hot and generate the sort of growth that will make the ever-growing Federal deficit, debt-to-GDP ratio, and Federal interest bill more manageable."

"Trump favours lower interest rates, lower oil prices, a weaker dollar, lower personal taxes and less regulation as part of this plan," Mould said.

Jason Furman

Jason Furman, a Harvard economist and former chair of President Barack Obama's Council of Economic Advisers, criticized the probe in a statement shared on X, calling it an "unprecedented attempt to use prosecutorial attacks to undermine" the Fed's independence.

"This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly," he wrote. "It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success."

Furman also wrote an op-ed, published in The New York Times, arguing that the probe was "already backfiring."

"If anything, this latest episode has weakened his ability to bend the institution to his will, at least in the short run," he wrote.

Josh Lipsky

Josh Lipsky, chair of international economics at the Atlantic Council, called the latest clash between Trump and Powell a "shocking escalation."

Lipsky said the timing was especially surprising, given the fact that Powell's term as Fed chair was set to end in May and the Fed has been cutting rates in recent months.

"Without having to fire the Fed chair, Trump was already getting the policy outcome he wanted — and would soon have the opportunity to appoint a new ally," Lipsky said. Now, Lipsky thinks Powell could remain as chair past his term's expiration date since it could be hard to appoint a new chair while the case is pending.

Sen. Bernie Sanders

Sen. Bernie Sanders, in a statement shared to X, said, "Trump's persecution of Jerome Powell and his political opponents must end."

"He is actively prosecuting Powell not because the Fed Chair broke the law, but because he won't bend the knee to Donald Trump," Sanders wrote. "This is what happened in dictatorships, not democracies."

Sen. Elizabeth Warren

Sen. Elizabeth Warren said on X that Trump was attempting to "complete his corrupt takeover of our central bank."

"He is abusing the law like a wannabe dictator so the Fed serves him and his billionaire friends," she said. "The Senate must not move ANY Trump Fed nominee."

Correction — January 12, 2026: This article has been updated to clarify Mossavar-Rahmani's remarks; she noted that legal experts, not Goldman Sachs, were expecting the Supreme Court to rule that the President can't terminate Fed officials.