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By Andrew Stanton and Adeola Adeosun
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The Department of Justice is dropping an investigation into Federal Reserve Chairman Jerome Powell, U.S. Attorney Jeanine Pirro announced on Friday.
Why It Matters
The DOJ's investigation into Powell raised concerns about the Fed's independence, as he joined a list of perceived Trump adversaries facing criminal investigations by the department. The Fed is designed to operate independently from the White House, with leaders serving fixed terms to insulate monetary policy from political pressure.
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It has also become a sticking point for Kevin Warsh, Trump's nominee to lead the Fed, as some senators have threatened to hold up his nomination until the DOJ ends the probe.
In January, Powell said the DOJ served the Fed with grand jury subpoenas and threatened a criminal indictment related to his testimony before a Senate committee regarding building renovations. Powell, however, said the probe should be “seen in the broader context of the administration’s threats and ongoing pressure,” as Trump has pushed the Fed to lower interest rates.
Jeanine Pirro Says Powell Investigation Over: What to Know
Pirro wrote on X the decision to end the investigation follows the Inspector General for the Federal Reserve being “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. I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas,” she wrote.
Pirro directed her office to “close our investigation as the IG undertakes this inquiry" and warned Powell about the investigation.
“Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so,” she said.
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A spokesperson for the DOJ pointed to Pirro’s post when reached by Newsweek for comment.
The investigation raised concerns among legal experts about the Fed's independence, as it occurred at a time when Trump and Powell were divided on interest rates. Trump has called for the Fed to lower interest rates, which have remained high in recent years as the Fed sought to tackle high inflation following the COVID-19 pandemic. But Powell has declined to lower interest rates, sparking the president's ire.
Carl Tobias, the Williams Chair in Law at the University of Richmond, told Newsweek the DOJ dropping the investigation is a “positive development" as it seemed unlikely the department could have proved Powell committed any crime.
“Powell has consistently said that his major goal in the short and longer term is to protect the Fed’s independence,” he said.
White House press secretary Karoline Leavitt told reporters the case was "not necessarily dropped."
"It's just being moved over to the inspector general, who has critical tools at their disposal to continue to look into financial mismanagement at the Fed. This has obviously been a priority for the president," she said.
What the Investigation Ending Means for Kevin Warsh
The announcement could clear the way for Warsh to advance through the Senate, where the DOJ investigation into Powell faced criticism. Senator Thom Tillis, a North Carolina Republican, had declined to support Warsh’s nomination over the investigation.
Tillis, who is not running for reelection, has described the investigation as "weak" and "frivolous" and said he would support Warsh's nomination only after the investigation ends.
"Kevin Warsh is a great nominee to be Chairman of the Federal Reserve, and I look forward to supporting him out of committee once the DOJ drops their bogus investigation into Chairman Powell that threatens the independence of the Fed," Tillis wrote on X on Tuesday.
Warsh’s nomination should have a “considerably easier” time advancing through the Senate as a result, Tobias said.
“He may still encounter some resistance, particularly from senators who disagree with Warsh and Trump on monetary policy and how best to lead the Fed in the remainder of Trump’s term,” he told Newsweek.
Senator Elizabeth Warren, a Massachusetts Democrat, said in a statement the announcement is “just an attempt to clear the path” for Warsh’s nomination.
“Let’s be clear what the Justice Department announced today: they threatened to restart the bogus criminal investigation into Fed Chair Powell at any time while failing to drop their ridiculous criminal probe against Governor Cook,” she wrote. “Anyone who believes Donald Trump’s corrupt scheme to take over the Fed is over is fooling themselves. The Senate should not proceed with the nomination of Kevin Warsh.”
Senator Dave McCormick, a Pennsylvania Republican, posted on X that Pirro's announcement is a "good development."
"The Inspector General is well suited to ensure a full, honest report. No agency is above scrutiny and the public trust," he wrote.
White House Responds to DOJ Ending Powell Probe
White House spokesperson Kush Desai responded to the announcement in a post to X, writing that taxpayers "deserve answers about the Federal Reserve’s fiscal mismanagement." The inspector general, he wrote, is in the "best position" to "get to the bottom of the matter."
"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.
Why Did the DOJ Subpoena Jerome Powell?
Powell said the probe centered on renovation costs for the Fed’s Marriner S. Eccles building and an adjacent structure. Costs have risen by $600 million over budget to $2.5 billion, driven by construction costs during the 2021-2022 inflation spike, unexpected asbestos removal needs, and Washington's building-height restrictions, which require expensive underground construction.
Powell described that reasoning as a pretext. He said he believes the threats are because of the Fed setting interest rates “based on our best assessment of what will serve the public, rather than following the preferences of the president.”
Trump denied having any knowledge of the investigation into the Fed, telling NBC News he “wouldn’t even think of doing it that way.”
A YouGov poll that surveyed 1,722 adults from January 16-19 found a slim plurality of Americans disapproved of the investigation, though many were unsure. Thirty-eight percent said they were not supportive of the probe, while only 32 percent said they supported it. An additional 30 percent were unsure of their views on the investigation.
Investigation Dealt Major Legal Blow in March
The decision comes more than a month after U.S. District Judge James Boasberg quashed a subpoena in the case, dealing a major blow to the DOJ on March 13.
He wrote that a "mountain of evidence" suggests the government served the subpoenas to pressure Powell into supporting lower interest rates.
“On the other side of the scale, the Government has produced essentially zero evidence to suspect Chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the Court can only conclude that they are pretextual. The Court therefore finds that the subpoenas were issued for an improper purpose and will quash them," he wrote.
Pirro said the judge "neutered the grand jury's ability to investigate crime" and that her office would appeal.
Trump Says Powell Investigation 'Not Dropped'
Trump pushed back Saturday on characterizations that the DOJ investigation into Powell had been fully dropped, telling a Fox News reporter the matter has been referred to the inspector general — and making clear his primary concern remains the cost of the Fed's building renovations.
"It's not dropped, and they're looking into the whole thing," Trump said. "What I want to look at is, how can a building that I could have done for $25 million cost $4 billion? That's a big thing, and he was in charge. So, we'll get to the bottom of it."
Trump also praised Pirro, saying: "I think Janine is fantastic."
Update 4/24/26, 2:30 p.m. ET: This article has been updated with additional information.
Update 4/25/26, 3:46 p.m. ET: This article has been updated with additional information.
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