Full Breakdown
Justice Department Ends Criminal Probe of Fed Chair Jerome Powell, Clearing Path for Kevin Warsh Confirmation
4/25/2026, 11:48:38 AM
Core Event
On April 24 2026 the U.S. Department of Justice announced that it is closing its criminal investigation of Federal Reserve Chair Jerome H. Powell. U.S. Attorney for the District of Columbia Jeanine Pirro said the probe into the Fed’s extensive building-renovation program will be transferred to the Federal Reserve’s Office of Inspector General, and that the DOJ may reopen the case if the IG uncovers wrongdoing. The decision removes the primary obstacle to Senate confirmation of President Donald Trump’s nominee, former Fed governor Kevin M. Warsh.
Background & Context
The investigation, launched in December 2025, focused on alleged fraud and false statements surrounding a multibillion-dollar renovation of the Fed’s Washington headquarters. The project’s budget grew from an initial estimate of $1.9 billion to roughly $2.5 billion, prompting criticism from President Trump, who repeatedly linked the renovation to Powell’s refusal to cut the federal funds rate. In March 2026 a federal judge quashed DOJ subpoenas, finding “essentially zero evidence” of criminal conduct. The probe became a political flashpoint, with Trump and his allies portraying it as a tool to pressure the central bank, while Fed officials described it as an attack on institutional independence.
Timeline
- Dec 2025 – DOJ opens criminal investigation of Powell’s handling of Fed renovations.
- Mar 2026 – Closed-door hearing; prosecutor admits no evidence of a crime.
- Mar 2026 – Judge James Boasberg quashes subpoenas, labeling the justification “thin and unsubstantiated.”
- Apr 23 2026 – Warsh testifies before the Senate Banking Committee.
- Apr 24 2026 – DOJ announces termination of the probe; Pirro directs the case to the Fed IG.
- May 15 2026 – Powell’s term as Fed chair expires (he remains a governor until Jan 2028).
Key Figures & Groups
- Jerome H. Powell – Fed Chair (term ends May 15 2026).
- Kevin M. Warsh – Former Fed governor, Trump’s nominee for chair.
- Donald J. Trump – President, vocal critic of Powell’s rate policy.
- Jeanine Pirro – U.S. Attorney for D.C., announced the probe’s closure.
- James Boasberg – U.S. District Judge who dismissed the subpoenas.
- Thom Tillis (R-NC) – Senate Banking Committee member who blocked Warsh’s vote pending the investigation.
- Elizabeth Warren (D-MA) – Ranking Democrat on the committee, critic of the nomination.
- Kush Desai – White House spokesperson supporting a swift Warsh confirmation.
- Fed Office of Inspector General – Now tasked with reviewing the renovation costs.
Data & Statistics
- Renovation budget: $2.5 billion (up from $1.9 billion).
- Cost overruns exceed $1 billion.
- Federal funds rate at the time of the probe: ? 3.6 %.
- Senate Banking Committee composition: 13-11 Republican majority.
- Powell’s separate term as a governor runs until January 2028.
Official Statements & Responses
- Pirro: Closed the criminal case, citing the IG’s authority, but warned she would restart the probe if the IG’s findings merit it.
- Judge Boasberg: Quashed the subpoenas, describing the DOJ’s justification as “thin and unsubstantiated.”
- Sen. Tillis: Stated he would no longer block Warsh’s confirmation now that the investigation is over.
- Warsh (Senate hearing): Asserted he never promised the White House any rate-cut commitment and would act independently if confirmed.
- White House (Desai): Expressed confidence that the Senate will swiftly confirm Warsh to restore “competence and confidence” in Fed decision-making.
Criticism & Opposition
- Sen. Warren labeled the investigation’s termination a maneuver to install a “sock puppet” and warned against confirming Warsh without safeguards for Fed independence.
- Democratic members of the Banking Committee questioned Warsh’s financial disclosures and his willingness to resist presidential pressure on monetary policy.
Conflicting Reports & Gaps
All sources agree that prosecutors found no evidence of criminal conduct; no substantive factual discrepancies appear. The precise date the investigation began is not uniformly reported, but the consensus is a December 2025 launch.
Verbatim Quotes
- “I will not hesitate to restart a criminal investigation should the facts warrant doing so.” — Jeanine Pirro, U.S. Attorney for D.C.
- “The president never once asked me to commit to any particular interest rate decision, period,” — Kevin Warsh, former Fed official
- “essentially zero evidence” — James Boasberg, U.S. District Judge
- “This is just an attempt to clear the path for Senate Republicans to install President Trump’s sock puppet Kevin Warsh as Fed Chair,” — Elizabeth Warren, Senator (MA)
- “I would.” — Donald Trump, President (CNBC interview)
- “is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.” — Jerome Powell, Fed Chair
What’s Next
The Fed’s Inspector General is expected to issue a comprehensive report on the renovation costs within weeks. The Senate Banking Committee, now free of the DOJ obstacle, is poised to vote on Warsh’s confirmation; a tie-breaking Republican vote could be decisive. Pirro’s statement leaves open the possibility of a renewed probe if the IG finds wrongdoing. Meanwhile, the Supreme Court is slated to rule by June on the legality of President Trump’s attempt to remove Fed Governor Lisa Cook, a case that could further affect the Fed’s composition and independence.
