Jerome Powell Referred to DOJ for Alleged Perjury

TLDR

• Powell allegedly lied about $2.5 billion renovation costs.
• Controversy may impact market sentiment and volatility.
• Past Fed leadership instability led to market fluctuations.

Jerome Powell, Chair of the U.S. Federal Reserve, has been referred to the Department of Justice (DOJ) by Representative Anna Paulina Luna for alleged perjury. Luna claims that Powell lied under oath regarding a $2.5 billion renovation project for the Federal Reserve’s headquarters. Former President Donald Trump has also called for Powell’s resignation amid the ongoing controversy.

Background on the Fed Chair and the Referral

Jerome Powell has been the Chair of the Federal Reserve since 2018. He was previously a member of the Fed’s Board of Governors, an investment banker, and assistant secretary of the Treasury. The criminal referral by Rep. Luna is unusual as she claims Powell committed perjury about the budget escalation from $1.9 billion to $2.5 billion on the Federal Reserve’s headquarters renovation.

Anna Paulina Luna is a U.S. Representative from Florida and is actively involved in Congressional oversight, though she has not previously been a major figure in financial regulation. Her move to refer Powell to the DOJ has heightened scrutiny over the renovation project and costs involved.

Denials and Demands for Investigation

Powell has denied the allegations of perjury through official channels. He stated that the increased costs were due to “legitimate construction challenges and design adjustments.” According to Powell, the necessary changes were minor and were implemented to avoid further project delays. He has formally requested the Office of Inspector General to review the project’s costs and management.

No direct public statements have been made by Powell on platforms like Twitter. The Federal Reserve’s responses so far have focused on defending the project changes and seeking a formal review to address the allegations.

Financial Market Implications

Although there is no proven direct effect on cryptocurrency markets due to this event, concerns about leadership instability at the Federal Reserve can affect market sentiment. Major assets like Bitcoin and Ethereum are sensitive to news about U.S. monetary policy, and any perceived instability can lead to market volatility.

Currently, there is no official documentation or evidence showing significant changes in total value locked (TVL), liquidity, or staking flows in crypto markets linked to this incident. Any market reaction is speculation-driven at this stage, with broader financial uncertainty impacting risk perception.

Historical Context of Fed Leadership Instability

Past events where Federal Reserve leadership faced criticism or uncertainty have led to short-term market volatility. Examples include the disputes between President Trump and Powell in 2018, which influenced cryptocurrency price swings, although these rarely led to sustained shifts unless followed by significant policy changes.

Historically, instability at the Fed often causes heightened risk-off behavior, leading to an increased demand for stable-assets like USD or stablecoins, and digital assets like Bitcoin, which are often viewed as hedges against macroeconomic volatility.

Regulatory Responses and Market Watch

There have been no comments or enforcement actions from major regulators like the SEC or CFTC related to this incident involving Jerome Powell. The market continues to monitor the situation, focusing on potential impacts on monetary policy and economic stability.

As the controversy develops, stakeholders in financial and crypto markets remain attentive to any changes in Federal Reserve policy or further government actions stemming from the allegations against Powell.

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