DOJ Ends Criminal Probe Into Fed Chair Jerome Powell, Clearing Way for Kevin Warsh Confirmation

The U.S. Department of Justice ended its criminal investigation of Federal Reserve Chair Jerome Powell on Friday, removing a major hurdle to the Senate confirming President Donald Trump’s nomination of Kevin Warsh to replace him.

U.S. Attorney Jeanine Pirro, the top federal prosecutor in the District of Columbia, said in a post on X that she was abandoning the probe, and CNBC reported that her announcement came three days after Warsh testified before the Senate Banking Committee on his nomination.

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Reuters and the Guardian both described the DOJ move as clearing the path for Warsh’s confirmation, with the Guardian noting that Pirro directed her office to close its investigation into renovations at the Fed headquarters that went over budget.

In the CNBC account, Pirro said the Federal Reserve’s inspector general “has been asked this morning” to investigate cost overruns in the “multibillion-dollar renovation of the central bank’s headquarters in Washington.”

The investigation had been made public in January after Powell released a video announcing he had been subpoenaed by the justice department, according to the Guardian.

Powell framed the probe as a pretext, telling the Guardian, “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions – or whether instead monetary policy will be directed by political pressure or intimidation.”

The DOJ’s decision also came with a warning that the probe could return, because Pirro said, “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”

The DOJ investigation centered on the Fed’s building renovations and the question of whether prosecutors could establish wrongdoing tied to those costs.

CNBC reported that Pirro said the inspector general “has been asked this morning” to investigate cost overruns in the “multibillion-dollar renovation of the central bank's headquarters in Washington,” and it added that the inspector general had been investigating the project since last summer.

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The Los Angeles Times put a specific figure on the scope of the renovation, stating that the probe focused on whether Powell had lied to Congress about the “$2.5-billion renovation of the central bank’s headquarters.”

The Guardian described the probe as being dropped after Pirro said she had directed her office to close its investigation into renovations at the Fed headquarters that went over budget.

In the CNBC account, Pirro’s decision was linked to the inspector general’s role, with a spokesperson telling CNBC that the inspector general is “actively working to complete” an “evaluation of the Board's building renovation project.”

The Politico report similarly described Pirro’s statement as shifting scrutiny to the inspector general, quoting Pirro saying, “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.”

Even as the DOJ closed its criminal investigation, Pirro did not rule out a restart, writing, “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”

The DOJ’s decision intersected with Sen. Thom Tillis’s blockade of Warsh’s confirmation, and multiple outlets tied the timing to Tillis’s stated condition for ending his hold.

CNBC reported that Sen. Thom Tillis, a North Carolina Republican and Banking Committee member, had an effective hold on the full Senate from voting to confirm Warsh as Fed chair unless the criminal investigation ended.

The Guardian described Tillis as saying he would block the nomination of Kevin Warsh until the justice department ended its investigation, and it quoted Tillis telling Warsh during his Senate hearing on Tuesday, “Let’s get rid of the investigation so I can support your nomination.”

Politico similarly said the move opened the door for Tillis to end his blockade of Kevin Warsh’s confirmation to replace outgoing Fed Chair Jerome Powell.

The Guardian also placed the dispute in the context of Trump’s broader conflict with the Fed over interest rate policy, noting that Trump had attacked Powell and branding the Fed chair a “moron” for voting against rate cuts.

CNBC reported that Powell and others said the real reason for Pirro’s probe was to pressure him and the Fed to lower interest rates as Trump wanted, and it said Powell asked the inspector general in July to review the renovation project after Trump criticized its cost.

The Guardian reported that Powell’s term ends on 15 May and that Republicans needed Tillis’s tie-breaking vote to get Warsh through the Senate’s banking committee.

Reactions to the DOJ’s move split along party and ideological lines, with Democrats portraying the end of the investigation as a political maneuver to accelerate Warsh’s path.

CNBC reported that Sen. Elizabeth Warren of Massachusetts, the top-ranking Democrat on the Banking Committee, said the abandonment of the Powell investigation “is just an attempt to clear the path for Senate Republicans to install President Trump's sock puppet Kevin Warsh as Fed Chair.”

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The Guardian echoed Warren’s critique, quoting her after the announcement: “This is just an attempt to clear the path for Senate Republicans to install President Trump’s sock puppet Kevin Warsh as Fed Chair.”

In the CNBC account, Warren also attacked the DOJ’s approach to other Fed-related figures, saying the Justice Department announced it would threaten to restart the investigation into Powell while failing to drop its probe against Governor Lisa Cook.

CNBC further reported that Trump last summer sought to fire Cook after an official in his administration claimed she made false statements on mortgage applications, and it said Cook denied those allegations and filed a lawsuit seeking to block her termination.

On the Republican side, CNBC quoted Senate Banking Committee Chairman Tim Scott, R-S.C., saying, “As I've said from the beginning, the American people deserve answers about the unacceptable cost overruns at the Federal Reserve.”

Politico added that House Financial Services Chair French Hill, R-Ark., said at a Bloomberg event, “I’m pleased about that, because this is not the way to run the railroad, and this gives the president a clear path for a new Fed chair, a new Fed leader,” reflecting a more supportive posture toward the DOJ decision.

With the DOJ probe ended, the immediate political question became whether the Senate would move quickly to confirm Kevin Warsh before Jerome Powell’s term ends on 15 May.

The Guardian said the move cleared the path for Donald Trump’s new nominee for chair to be confirmed, and it reported that Republicans needed Tillis’s tie-breaking vote to get Warsh through the Senate’s banking committee.

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Politico reported that Senate Republicans expected the Banking Committee could hold a vote on Warsh’s nomination next week, assuming Tillis is ready to drop his hold, and it said Senate Republicans want Warsh in place before Powell’s term expires May 15.

CNBC similarly said the DOJ’s action removed a major hurdle to Senate confirmation, and it described how Tillis had effectively blocked the full Senate from voting to confirm Warsh unless the criminal investigation ended.

The Guardian also emphasized that even with the end of Powell’s investigation, Trump’s battle with the Fed was not over yet, because the Supreme Court still has to rule on whether Trump’s firing of Lisa Cook was constitutional, with a ruling expected by June.

The Los Angeles Times described the investigation as having been abandoned after prosecutors found no evidence of wrongdoing, and it said the bank’s inspector general would take on the investigation into the costly renovations instead.

Politico added that Tim Scott invited Fed Inspector General Michael Horowitz to brief the committee within 90 days on his findings, linking the next phase of oversight to a concrete timeline.