The investigation by the Justice Department on the cost overruns in the renovations at the Federal Reserve during Jerome Powell’s chairmanship is now being closed, as confirmed by U.S. Attorney Jeanine Pirro on Friday. Pirro has instructed the Inspector General of the Federal Reserve to examine the building costs to ensure accountability to American taxpayers. She emphasized the importance of a thorough report and stated readiness to resume a criminal investigation if necessary.
Previously, a federal judge had halted subpoenas to the Fed’s board of governors, ruling that they were improperly used to pressure Powell into complying with President Donald Trump’s demands regarding interest rates. Pirro had planned to challenge this ruling and continue the investigation. Powell’s term as chair is scheduled to end on May 15.
The investigation led by Pirro had influenced Powell’s decision to remain in a Fed governor’s position until 2028, aligning with the end of Trump’s presidency. The threats from the Trump administration, including the criminal investigation, had posed a potential delay in the confirmation of Kevin Warsh as Powell’s successor. Senator Thom Tillis opposed the probe, considering it an attack on the Fed’s independence and vowed to block Warsh’s confirmation until the matter is resolved.
Critics, including Democrats and former Fed leaders, viewed the investigation into costs as a tactic to undermine the Fed’s autonomy from the White House. President Trump had inaccurately cited renovation costs, prompting Powell to correct him publicly. Three of the current Fed governors were appointed by President Joe Biden, with Lisa Cook facing a dismissal attempt by the Trump administration, pending in the Supreme Court.
Senator Elizabeth Warren criticized the announcement as a maneuver to facilitate Warsh’s nomination, expressing skepticism over the independence of the Fed under Trump’s influence. Warsh emphasized the importance of monetary policy independence and clarified that he made no commitments to Trump regarding interest rates. He attributed the post-pandemic inflation surge to the central bank’s policies under Powell, which he believed were detrimental to U.S. households.