Full Breakdown
DOJ Drops Criminal Probe of Fed Chair Jerome Powell, Clearing Path for Kevin Warsh
4/24/2026, 8:13:10 PM
Investigation Closure and Immediate Effect
On April 24 2026 the Justice Department announced that it is ending its criminal investigation of Federal Reserve Chair Jerome Powell over the central bank’s headquarters renovation. U.S. Attorney Jeanine Pirro directed her office to close the case and transferred oversight to the Fed’s Inspector General. The move removes the primary obstacle to Senate confirmation of President Donald Trump’s nominee, former governor Kevin Warsh, to succeed Powell.
Background and Political Context
The probe began in January 2026 after the Department of Justice alleged that Powell mishandled funds for a multibillion-dollar renovation of the Fed’s Washington, DC, headquarters. Subpoenas issued to the Fed were quashed in March by Judge James Boasberg, who said prosecutors presented “essentially zero evidence” of a crime. Republican Sen. Thom Tillis (N.C.) repeatedly warned he would block any Fed-chair nominee until the investigation ended, framing the probe as a political pressure campaign by the Trump administration to force rate cuts.
Key Players
- Jerome Powell – Current Fed chair, term ends May 15 2026.
- Jeanine Pirro – U.S. attorney for the District of Columbia, announced the probe’s closure.
- Kevin Warsh – Trump-nominated Fed chair candidate, former board member, net worth > $100 million.
- Thom Tillis – Senate Banking Committee member, holds a decisive vote.
- Kush Desai – White House spokesperson.
- Elizabeth Warren – Senate Democrat, vocal critic of the investigation’s handling.
- Michael E. Horowitz – Fed Inspector General tasked with the new review.
Timeline of Events
- Jan 2026: DOJ launches criminal probe of Powell.
- Mar 2026: Judge Boasberg quashes subpoenas, citing lack of evidence.
- Apr 21 2026: Warsh testifies before the Senate Banking Committee.
- Apr 24 2026: Pirro announces closure of the probe; White House issues supportive statement.
Financial Scope of the Renovation
The renovation of the Fed’s headquarters has been described as a “multibillion-dollar” project, with one source citing an estimated cost of $2.5 billion. The Inspector General’s review will focus on whether taxpayers bore undue costs.
Implications for Fed Independence and Monetary Policy
With the DOJ case dropped, the Senate is expected to move quickly toward confirming Warsh. Critics warn that the episode underscores political attempts to influence the Fed’s rate-setting independence, especially as President Trump has repeatedly urged the central bank to cut rates to support his affordability agenda. Warsh has pledged to act independently, stating he has never been asked by the president to commit to any specific rate decision.
Official Statements & Responses
- The White House, via Kush Desai, emphasized that the Inspector General’s “more powerful authorities” are best positioned to address taxpayer concerns.
- Pirro said the IG “has the authority to hold the Federal Reserve accountable” and that the DOJ would restart a criminal probe only if warranted.
- Tillis reiterated his opposition to any Fed-chair nominee until the legal matter is resolved, while also suggesting a congressional “off-ramp” for oversight.
- Warsh told the Senate he would be an “independent actor” and denied any promise to cut rates at the president’s request.
- The Federal Reserve declined to comment on the investigation’s termination.
Criticism & Opposition
Senator Elizabeth Warren condemned the investigation as a “bogus criminal probe” and warned that the Justice Department’s actions reflect a broader effort to undermine the Fed’s independence. She also highlighted the Department’s simultaneous failure to pursue a probe of Governor Lisa Cook, calling the approach “ridiculous.”
Verbatim Quotes
- “The IG has the authority to hold the Federal Reserve accountable to American taxpayers. 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,” — Jeanine Pirro, U.S. Attorney, D.C.
- “American taxpayers deserve answers about the Federal Reserve's fiscal mismanagement, and the Office of the Inspector General's more powerful authorities best position it to get to the bottom of the matter.” — Kush Desai, White House spokesperson
- “I will oppose the confirmation of any nominee for the Fed -- including the upcoming Fed Chair vacancy -- until this legal matter is fully resolved.” — Thom Tillis, U.S. Senator (N.C.)
- “Nor would I ever agree to do so if he had. … I will be an independent actor if confirmed as chair of the Federal Reserve.” — Kevin Warsh, Fed nominee
- “Let’s be clear what the Justice Department announced today: They threatened to restart the bogus criminal investigation into Fed Chair Powell at any time while failing to drop their ridiculous criminal probe against Governor Lisa Cook,” — Elizabeth Warren, U.S. Senator (Mass.)
- “The judge, James Boasberg, said prosecutors had produced “essentially zero evidence” to suspect Powell of a crime.” — James Boasberg, U.S. District Judge
What’s Next
The Fed Inspector General is expected to issue a detailed report on the renovation costs within weeks. Senate leadership has signaled intent to bring Warsh’s nomination to a floor vote once the report is released. Confirmation of Warsh would mark the first change in Fed leadership since Powell’s term began, with potential ramifications for upcoming monetary-policy decisions.
