Justice Department Formally Closes Powell Criminal Probe, Easing Path For Warsh Fed Nomination
The Justice Department on Friday closed its criminal probe of Federal Reserve Chair Jerome Powell in Washington, clearing a major obstacle to Kevin Warsh's expected nomination as Fed chair.
U.S. Attorney Jeanine Pirro said on X that she directed her office to end the investigation. She said the Fed inspector general will continue reviewing the renovation's costs. Prosecutors told a court they lacked evidence of criminal wrongdoing tied to Powell's June 2025 Senate testimony, and that admission helped prompt the closure. Pirro said her office could reopen a criminal case later even as she closed it now. Judge James Boasberg had earlier quashed subpoenas prosecutors used to seek Powell's testimony, finding little legal basis for them.
The episode traces back to a multi-year renovation of the Fed's Washington buildings that swelled to about $2.5 billion, roughly $600 million above early estimates. That cost growth drew scrutiny and led Powell to testify to the Senate Banking Committee in June 2025. President Trump publicly accused Powell of fraud over the overruns the next month and later pressed for accountability. After Trump nominated Kevin Warsh in January 2026, prosecutors opened the criminal probe and issued subpoenas that stalled Warsh's confirmation. Senator Thom Tillis had vowed to block Warsh until the Powell investigation ended, making today's closure politically decisive.
Coverage of the closure shifted over the week from procedural reporting to sharper claims of political influence and the possibility of future prosecutions. Outlets including MS NOW and CBS highlighted Pirro's public reversal and the White House framing that the inspector general has "more powerful authorities" to examine the renovation. Some commentators said the move clears the path for Warsh and possible shifts in Fed policy, while skeptics warned the probe could be reopened after a nomination. The Justice Department continues a separate criminal inquiry into Fed Governor Lisa Cook, a reminder that enforcement scrutiny of Fed officials is not finished.
📊 Relevant Data
The Federal Reserve's headquarters renovation project has incurred cost overruns of approximately $600 million beyond initial estimates, resulting in a total projected cost of $2.5 billion.
Trump claims Fed Chair Powell may be making money off HQ renovations — ABC 33/40
The Justice Department closed the probe into Jerome Powell after prosecutors admitted in court that they lacked evidence of any criminal wrongdoing related to his testimony on the renovation project.
Kevin Warsh, during his confirmation hearing, emphasized the importance of monetary policy independence and criticized the Federal Reserve's forward guidance practices, indicating he might seek to reform or eliminate them if confirmed.
Wall Street won't like it—but Kevin Warsh at the Fed could kill forward guidance — Fortune
The ongoing Justice Department criminal inquiry into Federal Reserve Governor Lisa Cook involves allegations of mortgage fraud.
US justice department opens criminal inquiry into Fed governor Lisa Cook — The Guardian
📌 Key Facts
- U.S. Attorney for D.C. Jeanine Pirro announced on X that she has directed her office to close the criminal investigation into Federal Reserve Chair Jerome Powell while the Fed Inspector General continues a review of the headquarters renovation costs.
- The Federal Reserve Inspector General’s office says it has been evaluating the renovation since July, has conducted at least two prior reviews that found no wrongdoing, and will release its findings publicly to Congress.
- The White House framed the inspector general as having “more powerful authorities” to probe the renovation and the administration is publicly casting the probe closure in political and policy terms.
- Sen. Thom Tillis had vowed to block Kevin Warsh’s Fed nomination while the Powell investigation continued; outlets say closing the probe removes that obstacle and paves the way for Warsh’s confirmation.
- Sen. Elizabeth Warren criticized the decision as an effort to clear the path for Warsh and highlighted that the Justice Department’s criminal inquiry into Fed Governor Lisa Cook remains ongoing.
- Pirro had publicly vowed earlier in the week to continue and appeal to revive the investigation but reversed course within days; she said she is closing the current probe while reserving the right to pursue Powell again in the future.
- In the days before the closure, prosecutors from Pirro’s office made an unannounced attempt to enter the Fed renovation site and were denied; subpoenas tied to Powell’s June 2025 Senate Banking testimony were previously quashed by Judge James Boasberg as an improper pretext, and DOJ’s effort to revisit that ruling was denied earlier this month.
- The reversal comes amid public pressure and commentary about political influence over the case, including a recent appearance by former President Trump on CNBC in which he said he was helping steer the Powell matter and made new, evidence-free allegations against Powell.
📰 Source Timeline (6)
Follow how coverage of this story developed over time
- The White House has publicly reacted to the Justice Department's decision to drop the investigation into Jerome Powell.
- CBS segment indicates the administration is now framing the closure of the probe in political and policy terms, beyond the DOJ legal explanation.
- Column recounts that as recently as Tuesday of the same week, Trump went on CNBC and effectively admitted he was helping steer the Powell case and made new, evidence-free allegations against Powell.
- Notes that on Wednesday, U.S. Attorney Jeanine Pirro publicly vowed to continue the case against Powell before reversing course and closing it on Friday morning.
- Reinforces that Pirro explicitly left the door open to potentially pursuing Powell again in the future, even as she closed the current investigation.
- Confirms that U.S. Attorney Jeanine Pirro explicitly directed her office on X to close the Powell investigation while the Fed inspector general continues a cost‑overrun review.
- Notes that the Fed inspector general’s office says it has been evaluating the renovation since July and will release its findings publicly to Congress.
- Reports that Pirro’s decision came just days after prosecutors from her office made an unannounced attempt to enter the Fed’s renovation site and were denied access.
- Recaps that the subpoenas threatening an indictment were tied to Powell’s June 2025 Senate Banking testimony about the renovation project.
- Details that Judge James Boasberg quashed the subpoenas as a pretext to pressure Powell to cut rates or resign, and that DOJ’s bid to revisit that ruling was denied earlier this month.
- Highlights Pirro’s public shift from vowing to appeal and continue the investigation to now closing it, while reserving the right to restart a criminal case.
- Includes a White House quote from spokesman Kush Desai framing the inspector general’s “more powerful authorities” as best suited to probe the Fed’s renovation costs.
- NPR confirms the U.S. Attorney for D.C. Jeanine Pirro announced on X that she has directed her office to close the Powell investigation as the Fed Inspector General undertakes a review.
- NPR notes explicitly that the Fed's inspector general has already reviewed the headquarters renovation project twice and found no wrongdoing.
- NPR reiterates that Sen. Thom Tillis, R-N.C., had threatened to block Kevin Warsh's nomination unless DOJ dropped the investigation, and characterizes the closure as paving the way for Warsh’s confirmation.
- Identifies U.S. Attorney Jeanine Pirro’s public statement explicitly directing her office to close the Powell investigation as the Fed inspector general conducts an inquiry into renovation costs.
- Clarifies that the Fed inspector general was already tasked with evaluating the renovation project before Pirro’s request, despite her implication it was requested that morning.
- Adds a White House statement from spokesperson Kush Desai framing the inspector general as having “more powerful authorities” to examine the renovation.
- Details Sen. Thom Tillis’s vow to block Kevin Warsh’s confirmation as long as the Powell probe continued and notes that closure removes that obstacle.
- Includes Sen. Elizabeth Warren’s on‑the‑record criticism calling the move an attempt to clear the path for Warsh and highlighting DOJ’s continuing criminal probe of Governor Lisa Cook.