The Justice Department’s extraordinary criminal investigation into Federal Reserve Chair Jerome Powell is over, with US Attorney for the District of Columbia Jeanine Pirro announcing on X on Friday that her office is closing the probe and handing responsibility for scrutinising the central bank’s multibillion-dollar headquarters renovation to the Federal Reserve’s own Inspector General.
Pirro wrote in her post: “This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns, in the billions of dollars, that have been borne by taxpayers. The IG has the authority to hold the Federal Reserve accountable to American taxpayers.”
She added: “Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry. Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”
The closure removes the most significant institutional obstacle blocking Kevin Warsh’s path to confirmation as Powell’s successor, with Powell’s term as Federal Reserve Chair set to expire on May 15 and Warsh having already appeared before the Senate Banking Committee for a confirmation hearing earlier this week on April 21.
Republican Senator Thom Tillis of North Carolina, who sits on the Banking Committee and whose vote was critical to advancing the confirmation, had placed an effective hold on the Warsh vote, describing Pirro’s probe as “frivolous” and vowing not to support confirmation while the criminal investigation remained active.
The DOJ investigation, which launched in January after Trump spent months publicly attacking Powell for not cutting interest rates fast enough, had been fraught from the beginning in ways that ultimately made its continuation legally and politically untenable.
A federal prosecutor told a judge last month that his office “didn’t have evidence of any crimes,” and a federal judge subsequently quashed the DOJ’s subpoenas twice, ruling that the investigation appeared aimed at pressuring Powell to yield to Trump’s demands on interest rates rather than investigating genuine criminal conduct.
The renovation of the Fed’s Marriner S. Eccles headquarters building in Washington originally carried a price estimate of approximately $1.9 billion but has grown to around $2.5 billion, with the cost increases attributed to asbestos remediation, soil contamination, a higher-than-expected water table, rising material and labour costs, and design changes required to comply with historic preservation rules.
Powell, who in January strongly rebuked the investigation as politically motivated, and his allies had long argued that the real purpose of Pirro’s probe was not to investigate renovation costs but to create institutional pressure on the independent central bank to lower interest rates as Trump desired, a characterisation the administration denied publicly even as a federal judge accepted it as a credible reading of the subpoenas.
The abrupt reversal came after weeks of private Republican Senate pressure that grew increasingly public, with Trump himself having muddied the waters as recently as Tuesday when he told reporters he could not imagine Powell “taking money on construction,” while simultaneously leaving open the possibility that he was, a contradiction that illustrated how politically exposed the continuation of the probe had become even within Republican ranks.
