GEOFF BENNETT: Welcome to the "News Hour."

The Justice Department has launched an unprecedented criminal investigation against the Federal Reserve and its chairman, Jerome Powell.

AMNA NAWAZ: For his part, Powell made it clear he was fed up with what he sees as threats from President Trump and said he would not capitulate to political pressure when shaping economic policy.

It was a stunning turn of events, as several lawmakers from the president's own party also broke with Trump, suggesting his team had gone too far.

JEROME POWELL, Federal Reserve Chairman: On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas.

AMNA NAWAZ: Last night, an extraordinary message from Fed Chair Jerome Powell.

JEROME POWELL: No one, certainly not the chair of the Federal Reserve, is above the law, but this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure.

AMNA NAWAZ: That video posted by the Federal Reserve Sunday evening in response to a criminal investigation launched by U.S.

attorney Jeanine Pirro into the $2.2 billion renovation of the Federal Reserve headquarters.

But Powell claimed that is not what's behind this probe.

JEROME POWELL: Those are pretexts.

The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.

AMNA NAWAZ: Since returning to office, President Trump has consistently and frequently attacked Powell.

DONALD TRUMP, President of the United States: No, he's a political hack, not very good.

He's not a smart guy.

AMNA NAWAZ: Threatening to fire him.

DONALD TRUMP: He's got some real mental problems.

No, there's something wrong with him.

It's just ridi -- I will be honest.

I'd love to fire his (EXPLETIVE DELETED).

AMNA NAWAZ: And criticizing the pace of interest rate cuts.

DONALD TRUMP: He's too late, always too late, a little slow, and I'm not happy with him.

AMNA NAWAZ: Over the last year, the Federal Reserve cut interest rates three times, most recently in December.

But the headquarters renovation project has fueled Trump's attacks, as in this exchange with Powell in July, when Trump visited the construction site.

DONALD TRUMP: It looks like it's about $3.1 billion.

It went up a little bit, or a lot.

So the 2.7 is now 3.1.

JEROME POWELL: I'm not aware of that, Mr.

President DONALD TRUMP: Yes, it just came out.

AMNA NAWAZ: In a Sunday night NBC interview, the president denied any involvement in the investigation, saying -- quote -- "I don't know anything about it."

Powell was first appointed to the Fed board by then President Obama in 2012, nominated by Trump in his first term to be chair in 2017, and reappointed by then-President Biden in 2022.

KEVIN HASSETT, Director, National Economic Council: I would expect that the markets would be happy to see that there's more transparency at the Fed.

AMNA NAWAZ: Today, National Economic Council Director Kevin Hassett, a potential replacement for Powell, defended the Justice Department's probe.

KEVIN HASSETT: I think that it's really important to understand where the taxpayer money goes and understand why it goes this way or that.

AMNA NAWAZ: As did White House Press Secretary Karoline Leavitt.

KAROLINE LEAVITT, White House Press Secretary: The president has every right to criticize the Fed chair.

He has a First Amendment right, just like all of you do.

And one thing's for sure the president's made it quite clear, is Jerome Powell is bad at his job.

As for whether or not Jerome Powell is a criminal, that's an answer the Department of Justice is going to have to find out.

AMNA NAWAZ: Limited pushback today from congressional Republicans, Senator Kevin Cramer calling Powell a - - quote -- "bad Fed chair," but adding, "I do not believe, however, he is a criminal."

Senator Thom Tillis went further, saying he would -- quote -- "oppose the confirmation of any nominee for the Fed, including the upcoming Fed chair vacancy, until this legal matter is fully resolved."

Reaction from House Speaker Mike Johnson was definitive when asked if the DOJ was being weaponized.

REP.

MIKE JOHNSON (R-LA): Of course not.

AMNA NAWAZ: The markets reacted initially too, with the Dow at one point dropping more than 400 points after the opening bell.