The Justice Department has concluded its inquiry into cost overruns during the renovations at the Federal Reserve under the leadership of Jerome Powell, according to U.S. Attorney Jeanine Pirro. Pirro stated that the Inspector General of the Federal Reserve has been tasked to examine the building expenses. She emphasized the IG’s ability to ensure accountability to American taxpayers and expressed expectations for a prompt and comprehensive report to address lingering concerns that prompted the issuance of subpoenas.
Despite closing the investigation, Pirro made it clear that she is prepared to resume a criminal probe if warranted by the facts. The recent ruling by a federal judge had blocked subpoenas to the Fed’s board of governors, citing improper motives related to pressuring Powell to comply with President Trump’s requests to swiftly reduce interest rates or step down. Pirro had previously vowed to challenge this ruling and pursue the investigation further.
Jerome Powell’s term as chair is scheduled to end on May 15. The investigation led by Pirro had a notable impact on Powell’s decision to maintain his position as a Fed governor until 2028, aligning with the conclusion of Trump’s presidency. Historically, Fed chiefs step down from the board at the end of their leadership terms.
The Trump administration’s actions, including threats against Powell and the criminal investigation, were causing delays in the Senate confirmation of Kevin Warsh as the next Fed chair, nominated by Trump. Senator Thom Tillis from North Carolina, a member of the Senate banking committee, criticized the investigation as an unwarranted attack on the Fed’s independence and vowed to block Warsh’s confirmation until the matter is resolved.
Democratic Senator Elizabeth Warren and former Federal Reserve leaders condemned the cost investigation as a pretext to undermine the Fed’s autonomy from the White House. Trump’s inaccurate statements regarding the renovation costs had been corrected by Powell last year, highlighting the administration’s misleading claims. Notably, three of the seven current Fed governors were appointed by former President Joe Biden, including Lisa Cook, whose dismissal is being pursued by the Trump administration and is pending before the U.S. Supreme Court.
Warsh, a former Fed governor, emphasized the importance of monetary policy independence in his recent statements to senators. He clarified that he had not made any commitments to Trump regarding interest rate adjustments. Warsh criticized the Powell-led central bank for contributing to post-COVID-19 inflation that continues to impact American households negatively.