Justice Department Ends Powell Investigation
The U.S. Department of Justice has decided to close its investigation into Jerome Powell, according to Jeanine Pirro. The decision removes a major hurdle for Kevin Warsh, the choice of Donald Trump to lead the central bank.
The probe had focused on renovation costs tied to Federal Reserve buildings and had become a key political issue affecting Warsh’s confirmation process.
Investigation Shifted to Internal Watchdog
Instead of continuing the inquiry, Pirro has referred the matter to the Federal Reserve’s Office of Inspector General, which is already reviewing cost overruns related to the central bank’s Washington headquarters.
The watchdog is expected to deliver a comprehensive report, which officials say will clarify concerns about project spending and accountability.
Federal Judge Previously Blocked Subpoenas
The investigation faced a major setback when a federal judge halted subpoenas targeting the Fed’s Board of Governors. Chief Judge James Boasberg ruled that prosecutors failed to present sufficient evidence of wrongdoing and suggested the probe may have been used to pressure Powell over interest rate decisions.
The court found little indication of criminal activity, effectively weakening the legal basis for continuing the case.
Political Pressure and Confirmation Roadblocks
The probe had also created political tension in Washington. Republican Senator Thom Tillis had opposed Warsh’s nomination while the investigation remained active, calling it unjustified.
With the case now closed, Tillis is expected to reconsider his stance, potentially allowing the confirmation process to move forward.
Senate Review and Next Steps
Senate Banking Committee Chair Tim Scott announced plans to request a briefing from the inspector general within 90 days, ensuring congressional oversight of the ongoing review.
The White House has expressed confidence that Warsh’s nomination will proceed smoothly, now that the investigation is no longer an obstacle.
Powell’s Position and Future Uncertainty
Despite the closure of the probe, Powell has previously stated that he intends to remain in his position until the matter is fully resolved with transparency.
Pirro also indicated that the Justice Department could reopen the investigation depending on the findings of the inspector general.
Rising Costs Behind Fed Renovation Project
The Federal Reserve’s renovation project has drawn scrutiny due to rising costs. The current budget stands at approximately $2.46 billion, significantly higher than initial estimates due to increased material and labor expenses following the pandemic.
The inspector general has been reviewing the project since mid-2025, focusing on cost overruns and project management practices.
Ongoing Political Tensions Around Fed Policy
The investigation has been part of broader tensions between Trump and Powell, particularly regarding monetary policy. Trump has repeatedly criticized Powell for resisting calls to aggressively cut interest rates.
Powell, for his part, has suggested that the investigation was politically motivated, aimed at influencing central bank decisions.
