DOJ Ends Investigation of Fed Chair Jerome Powell

The Department of Justice has ended its criminal investigation of Federal Reserve Chair Jerome Powell.

Jeanine Pirro, the top federal prosecutor in the District of Columbia, said in an April 24 post on X that she has directed her office to close its investigation.

“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,” Pirro said.

Pirro will receive a comprehensive report from the Inspector General regarding the central bank’s renovations of its headquarters in Washington.

“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry,” she added. “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”

The Federal Reserve declined to comment on the decision.

The announcement could clear a key hurdle for the confirmation of Kevin Warsh, President Donald Trump’s nominee to replace Powell as head of the Federal Reserve System.

Powell’s term as Fed chair ends on May 15, but he has said he would stay on temporarily until his successor is confirmed.

Sen. Thom Tillis (R-N.C.), a member of the Senate Banking Committee, has said he would block Warsh’s nomination until the Justice Department’s investigation is ended or resolved.

In January, Powell confirmed in a video statement that the Fed had been served with grand jury subpoenas by the Department of Justice regarding the central bank’s renovations and his congressional testimony in the summer of 2025.

“Those are pretexts,” he said. “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.”

In 2017, the Federal Reserve had approved a $1.9 billion plan to conduct the first comprehensive overhaul of its headquarters in the institution’s century-long history. The price tag increased to $2.5 billion due to growing labor and material costs, extended construction timelines, and asbestos and soil contamination.

Last month, a federal judge blocked the subpoenas, saying they were intended to “harass and pressure” Powell into lowering rates or to pressure him to resign.

“Did prosecutors issue those subpoenas for a proper purpose? The Court finds that they did not,” Judge James Boasberg said in a March 13 ruling. “On the other side of the scale, the Government has offered no evidence whatsoever that Powell committed any crime other than displeasing the President.”

Trump recently stated he believes the investigation should continue.

“What they’ve done … is probably corrupt, but what it really is is incompetent, and we have to show the incompetence of that,” Trump told Fox Business in an April 15 interview.

He also threatened to fire Powell if he did not step down next month.

“I’ve held back [from] firing him. I’ve wanted to fire him,” he said. “But I have to be controversial, you know. I want to be uncontroversial. But he will be fired.”

Democrats on the House Judiciary Committee said the administration’s decision is an admission that the probe was “a political tactic and had nothing to do with evidence of a crime.”

“The White House is using criminal prosecutions to free up spots on the Federal Reserve Board so the President can manipulate the money supply to cover up for his disastrous economic policies,” they said in an April 24 statement posted on X.

“And US Attorney Jeanine Pirro is content to abuse the grand jury process to attack Trump’s chosen political targets.”

House Committee on Financial Services Chairman French Hill (R-Ark.) welcomed the decision, calling the investigation a “distraction” that would delay Warsh’s nomination.

“With the DOJ probe concluded and the Inspector General review ongoing, I hope the Senate can get President Trump’s highly qualified nominee, Kevin Warsh, confirmed and in place as soon as possible to further advance President Trump’s economic agenda,” Hill said in a statement to The Epoch Times.

Now that the probe has been dropped, the administration is still optimistic that the Office of the Inspector General will complete a thorough investigation “to get to the bottom of the matter,” Kush Desai, senior deputy press secretary at the White House, said in an April 24 post on X.

“The White House remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision-making,” he wrote.

Sen. Tim Scott (R-S.C.), chairman of the Senate Banking Committee, told CNBC’s “Squawk Box” earlier this week that ending the probe and allowing Congress to investigate were crucial to getting Warsh confirmed.

“Wherever that leads us, we should go. If that leads to a criminal referral, so be it,” Scott said. “But give us Kevin Warsh at the Fed so that we have access to all the information necessary.”

The House Financial Services Committee, he noted, would create a committee to maintain “permanent oversight of construction projects within the jurisdiction of the banking committee.”

Futures market data indicate that investors have increased their bets that the Fed will follow through with additional monetary policy easing by year’s end.

If confirmed by the upper chamber, Warsh could helm the June 16 and 17 Federal Open Market Committee policy meeting.

Nathan Worcester contributed to this report.