Full Breakdown
DOJ Drops Probe into Fed Chair Jerome Powell, Clearing Path for Kevin Warsh Confirmation
4/24/2026, 8:47:35 PM
Background & Context
The Justice Department’s criminal investigation targeted Federal Reserve Chair Jerome Powell over alleged cost overruns in a renovation of the Fed’s Washington headquarters. The project, approved by the Board in 2017, was initially budgeted at $1.9 billion. The Fed later said the estimate rose to about $2.5 billion because of design changes, higher material and labor costs, unexpected asbestos, and a sinkhole. President Donald Trump and his allies framed the overruns as evidence of fiscal mismanagement and used the issue to pressure Powell on interest-rate policy.
Timeline of Key Events
- 2017 – Fed Board approves renovation of two historic buildings.
- July 2025 – Chair Powell asks Inspector General Michael Horowitz for a fresh review.
- January 2025 – Powell releases a video announcing grand-jury subpoenas.
- March 13 2025 – Chief Judge James Boasberg blocks the subpoenas, citing lack of evidence.
- April 24 2026 – U.S. Attorney Jeanine Pirro announces the DOJ is dropping the criminal probe.
- May 15 2026 – Powell’s term as chair ends; he may remain a governor until 2028.
- June 2026 (expected) – Supreme Court to rule on the constitutionality of former Fed Governor Lisa Cook’s firing.
Data & Statistics
- Original renovation estimate: $1.9 billion.
- Revised estimate reported by the Fed: ? $2.5 billion.
- President Trump’s claim during a site visit: ? $3.1 billion.
- Inspector General’s audits: conducted twice, found no wrongdoing.
- Subpoena count: two grand-jury subpoenas, both quashed.
Official Statements & Responses
U.S. Attorney Jeanine Pirro said the investigation was closed as the Fed’s inspector general assumes “the more powerful authorities” to examine the overruns, adding she would restart a probe if warranted. White House spokesman Kush Desai emphasized taxpayers’ right to answers and expressed confidence that the Senate will swiftly confirm Kevin Warsh. The Federal Reserve declined comment on the DOJ announcement. Senator Thom Tillis (R-NC) had previously blocked any Fed nominee until the probe was dropped.
Criticism & Opposition
President Trump and budget chief Russell Vought repeatedly accused Powell of “fiscal mismanagement” and likened the project to the Palace of Versailles. Trump called Powell a “jerk” and pressed for lower interest rates. Former Fed chairs Janet Yellen, Ben Bernanke and Alan Greenspan denounced the investigation as an unprecedented attempt to undermine central-bank independence. Democrats voiced concern that Warsh’s alignment with Trump could compromise the Fed’s autonomy.
Verbatim Quotes
- “This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns – in the billions of dollars – that have been borne by taxpayers,” — Jeanine Pirro, U.S. Attorney for D.C.
- “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.” — Jeanine Pirro, U.S. Attorney for D.C.
- “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation,” — Jerome Powell, Federal Reserve Chair
- “No one—certainly not the chair of the Federal Reserve—is above the law,” — Jerome Powell, Federal Reserve Chair
- “Let’s get rid of the investigation so I can support your nomination,” — Thom Tillis, Republican Senator from North Carolina
- “A mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning,” — James Boasberg, Chief Judge, U.S. District Court for D.C.
Conflicting Reports & Gaps
Sources differ on the renovation’s final cost: the Fed cites $2.5 billion, while Trump asserted $3.1 billion. The Justice Department framed the probe as a criminal inquiry into cost overruns, yet the inspector general found no wrongdoing and the judge ruled the subpoenas were a pretext to influence monetary policy. No public report from the inspector general’s new review is yet available.
What’s Next
The Senate Banking Committee will consider Kevin Warsh’s confirmation, pending a vote that may be affected by the pending Supreme Court decision on Lisa Cook’s dismissal. Powell is expected to remain on the Fed’s Board of Governors through 2028 unless he resigns. The inspector general’s forthcoming report will determine whether further oversight of the renovation is required.
