Justice Department Formally Closes Powell Criminal Probe, Easing Path For Warsh Fed Nomination
The Justice Department formally closed its criminal investigation into Federal Reserve Chair Jerome Powell on Friday, a move that clears a major barrier to Kevin Warsh's confirmation. U.S. Attorney for the District of Columbia Jeanine Pirro directed her office on X to end the probe while the Fed inspector general continues a review of renovation costs.
Pirro said her office could reopen a criminal case later, and prosecutors from her office had recently been denied entry when they sought to inspect the Fed renovation site. Judge James Boasberg had previously quashed subpoenas tied to the investigation, and the Justice Department's bid to revisit that ruling was denied earlier this month.
The episode traces back to cost overruns on the Federal Reserve's multi-year headquarters renovation, which swelled to about $2.5 billion — roughly $600 million above original estimates. Powell's June 2025 Senate testimony about the project and President Trump's public fraud accusations that began in July 2025 led to subpoenas after Trump nominated Warsh in January 2026, and Sen. Thom Tillis had vowed to block Warsh until the probe was resolved.
Coverage of the development shifted as new details emerged. Early reports treated the closure as an operational DOJ decision, but later reporting from NPR and PBS emphasized political pressure and the nomination stakes. Outlets including MS NOW and CBS highlighted Pirro's public direction to close the case and White House comments framing the inspector general as the proper investigator, while critics such as Sen. Elizabeth Warren called the move an attempt to clear the path for Warsh.
Markets and commentators reacted quickly. Traders read the closure as removing a key political risk to a Fed leadership change and priced in a greater chance of lower interest rates, though some economists urged caution. Social media split between viewers who called the decision politically driven and those who cheered an end to what they called a bogus probe; the Fed inspector general says it has been reviewing the renovation since July and will report its findings to Congress.
📊 Relevant Data
The Federal Reserve's headquarters renovation project has a total estimated cost of $2.5 billion, representing an overrun of approximately $600 million from the original $1.9 billion estimate.
The $2.5 billion renovation at the center of the DOJ's criminal investigation of the Federal Reserve — NBC News
In his June 2025 Senate testimony, Jerome Powell stated that the Federal Reserve's Eccles Building had 'never had' a serious renovation, despite a major renovation project that occurred from 1999 to 2004.
Jerome Powell hit with a criminal referral over Fed's $2.5B 'Palace of Versailles' renovation — Yahoo Finance
The ongoing Department of Justice criminal probe into Federal Reserve Governor Lisa Cook involves allegations of mortgage fraud, stemming from a criminal referral by the Federal Housing Finance Agency.
DOJ probing mortgage fraud claims against Fed governor Lisa Cook, AP source says — PBS NewsHour
📌 Key Facts
- U.S. Attorney for D.C. Jeanine Pirro announced on X that she has directed her office to close the criminal probe into Federal Reserve Chair Jerome Powell, which concerned alleged false statements to Congress about the Fed’s headquarters renovation, while the Fed Inspector General conducts a review of renovation cost overruns.
- The Federal Reserve Inspector General’s office has been evaluating the renovation since July, has reviewed the project multiple times (finding no wrongdoing in prior reviews), and says it will release its findings publicly to Congress; the White House characterized the IG as having “more powerful authorities” to examine the matter.
- The closure followed a series of confrontations and legal moves: prosecutors from Pirro’s office recently attempted an unannounced entry to the renovation site and were denied; subpoenas tied to Powell’s June 2025 Senate testimony had threatened an indictment but were quashed by Judge James Boasberg, and the DOJ’s bid to revisit that ruling was denied earlier this month.
- Pirro had publicly vowed days earlier to continue and appeal the investigation, but reversed course to close it on Friday while explicitly reserving the right to potentially reopen or restart a criminal case in the future.
- Sen. Thom Tillis had publicly vowed to block Kevin Warsh’s Fed nomination unless DOJ dropped the investigation; several outlets and officials say the probe’s closure removes that stated obstacle, and the White House urged Tillis to move quickly on Warsh’s confirmation.
- Democrats and critics, including Sen. Elizabeth Warren, called the move an attempt to clear the path for Warsh and politically motivated; reporting also noted President Trump recently acknowledged involvement in steering the Powell case and made new, unsubstantiated allegations about Powell.
- Multiple outlets (PBS, CBS, NPR and others) corroborated that the DOJ is dropping the criminal probe focused on alleged false statements to Congress about the renovation, while the administration has framed the closure in broader political and policy terms beyond the DOJ legal explanation.
- At the same time, reporting noted DOJ retains other active matters related to the Fed: MS NOW highlighted that the department continues a criminal probe of Governor Lisa Cook.
📊 Analysis & Commentary (1)
"The WSJ editorial argues that the Justice Department’s closure of the criminal probe into Jerome Powell was a welcome end to a politically motivated roadblock, clearing the way for Kevin Warsh’s confirmation and deserving of support."
📰 Source Timeline (8)
Follow how coverage of this story developed over time
- CBS video piece reiterates that U.S. Attorney Jeanine Pirro announced the end of the criminal probe into Jerome Powell.
- Confirms the probe was tied to the Federal Reserve's headquarters renovation project.
- PBS segment confirms the DOJ is dropping its criminal probe into Jerome Powell over whether he lied to Congress about Fed headquarters renovations.
- U.S. Attorney for D.C. Jeanine Pirro says the Fed inspector general will instead examine renovation cost overruns.
- White House Press Secretary Karoline Leavitt publicly urges Sen. Thom Tillis to move forward quickly on Kevin Warsh’s confirmation after he threatened to block it unless DOJ dropped the investigation.
- Segment reiterates that the probe focused specifically on alleged false statements to Congress about renovation costs.
- 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.