Full Breakdown
DOJ Ends Powell Probe, Clearing Path for Warsh Confirmation
4/25/2026, 4:04:29 AM
Core Event: DOJ Drops Criminal Investigation into Fed Chair Jerome Powell
On April 24 2026 the Justice Department announced that it is closing its criminal probe of Federal Reserve Chair Jerome Powell. U.S. Attorney for the District of Columbia Jeanine Pirro said the investigation, which focused on alleged cost overruns in the Fed’s Washington headquarters renovation, will be transferred to the Fed’s Office of Inspector General. The move removes the primary obstacle to Senate confirmation of President Donald Trump’s nominee, former governor Kevin Warsh.
Background & Context: Renovation Dispute and Political Pressure
The probe originated in January 2026 after Powell’s testimony about a multibillion-dollar renovation of the Marriner S. Eccles Federal Reserve Board Building and the adjacent 1951 Constitution Avenue Building. Initial estimates of $1.9 billion rose to roughly $2.5 billion, driven by asbestos abatement, higher material costs, and design changes for blast-resistant windows. President Trump repeatedly linked the project to Powell’s refusal to cut the federal funds rate, accusing the chair of “fiscal mismanagement.”
Timeline
- Jan 2026 – DOJ launches criminal investigation; subpoenas issued to the Fed.
- Mar 13 2026 – Judge James Boasberg quashes subpoenas, calling the justification “thin and unsubstantiated.”
- Early Apr 2026 – Warsh testifies before the Senate Banking Committee; Sen. Thom Tillis blocks a vote pending resolution of the probe.
- Apr 24 2026 – Pirro announces the probe’s closure and transfer to the Fed’s inspector general.
Data & Statistics
- Original renovation budget: $1.9 billion.
- Updated estimate: $2.5 billion (? $600 million increase).
- Federal funds rate at the time of the announcement: ? 3.6 %.
Official Statements & Responses
Pirro posted on X that the inspector general “has the authority to hold the Federal Reserve accountable to American taxpayers” and that she expects a “comprehensive report in short order.” White House spokesman Kush Desai echoed the sentiment, saying taxpayers deserve answers and that the Senate will “swiftly confirm Kevin Warsh.” The Federal Reserve declined to comment on the decision.
Criticism & Opposition
Democratic Senate Banking Committee ranking member Elizabeth Warren called the DOJ’s action “an attempt to clear the path for a sock-puppet nominee.” She warned that the move threatens Fed independence. Republican Sen. Thom Tillis, who had blocked Warsh’s confirmation, said he would reassess his stance only after the investigation ends.
Why It Matters / Impact
The closure eliminates the procedural hurdle that stalled Warsh’s confirmation, potentially allowing a leadership change before Powell’s term ends on May 15 2026. Warsh has asserted he will remain “strictly independent” on monetary policy, but his prior statements suggest a willingness to consider rate cuts, raising market expectations of a more dovish stance.
Conflicting Reports & Gaps
President Trump has cited a $3.1 billion cost figure, higher than the $2.5 billion cited by the Fed and DOJ. No evidence of criminal conduct was found, yet the inspector general’s pending report may reveal additional financial details. Warsh’s concrete policy plans beyond his pledge of independence remain unspecified.
Verbatim Quotes
- “The IG has the authority to hold the Federal Reserve accountable to American taxpayers.” — Jeanine Pirro, U.S. Attorney
- “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
- “The president never once asked me to commit to any particular interest rate decision, period,” — Kevin Warsh, Fed-chair nominee
- “I would.” — Donald Trump, CNBC interview
- “essentially zero evidence” — James Boasberg, U.S. District Judge
- “I applaud it,” — French Hill, Chairman, House Financial Services Committee
What’s Next
The Fed’s inspector general is expected to release its renovation audit within weeks. The Senate Banking Committee may schedule a confirmation vote on Warsh as soon as the report is available. Prosecutors retained the authority to reopen the criminal probe if new facts emerge, leaving open the possibility of further legal scrutiny of Powell’s tenure.
