Jeanine Pirro, U.S. attorney for the District of Columbia, announced Friday that the investigation into Federal Reserve Chair Jerome Powell has been closed. In a post on X, Pirro stated that the Fed's inspector general has been asked to scrutinize building cost overruns, running into billions of dollars, that have been borne by taxpayers.
While that review proceeds, the investigation into Powell—which prosecutors have said involved potential fraud charges related to renovations of the Federal Reserve building and statements Powell made during congressional testimony—has been terminated. "The IG has the authority to hold the Federal Reserve accountable to American taxpayers," Pirro said in her statement. "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." Pirro added she "will not hesitate to restart a criminal investigation should the facts warrant doing so."
Political Context
The development coincides with President Donald Trump's push to install Kevin Warsh as the next Fed chair, as Powell's term ends in May. Powell can choose to remain on the board as a Fed governor until January 2028, and he had vowed to stay on at least as long as the investigation into the renovations continued. Trump has made no secret of his distaste for Powell, repeatedly calling for him to resign and threatening to fire him, purportedly over cost overruns on the renovation. At one point, Trump toured the construction site to humiliate Powell over the $2.5 billion remodel, but the effort backfired when Powell called him out for using falsely inflated figures. Ironically, the project is over budget partly because Trump appointees overruled architects and insisted on using white marble instead of glass.
Reactions
Powell has long asserted the Fed's independence and resisted Trump's commands to lower interest rates. Senator Elizabeth Warren (D-Mass.) expressed concern that Warsh, as Trump's pick, would not maintain that independence. "This is just an attempt to clear the path for Senate Republicans to install President Trump's sock puppet Kevin Warsh as Fed Chair," Warren, the ranking Democrat on the Senate Banking, Housing, and Urban Affairs Committee, said in a statement. "Anyone who believes Donald Trump's corrupt scheme to take over the Fed ... is fooling themselves. The Senate should not proceed with the nomination of Kevin Warsh."
