DOJ drops criminal investigation into Jerome Powell—what it means for Kevin Warsh

The Department of Justice dropped its criminal investigation of Federal Reserve Chair Jerome Powell on Friday.

The move by U.S. Attorney Jeanine Pirro removes a major hurdle to President Donald Trump’s nomination of Kevin Warsh to replace him.

Sen. Thom Tillis, a North Carolina Republican, had put an effective hold on the Senate confirming Warsh unless the criminal investigation of Powell was dropped.

Jeanine Pirro, the top federal prosecutor in the District of Columbia, announced the decision to abandon the Powell probe in a post on X, which came three days after Warsh testified before the Senate Banking Committee on his nomination.

Pirro said the Fed’s inspector general would investigate cost overruns of the central bank’s multi-billion-dollar renovation of its headquarters in Washington, D.C.

The Department of Justice on Friday dropped its criminal investigation of Federal Reserve Chair Jerome Powell, removing a major hurdle to the Senate confirming President Donald Trump’s nomination of Kevin Warsh to replace him.

The investigation was first made public in January after Powell released a video announcing he had been subpoenaed by the justice department. 

In rare, pointed remarks about the White House, Powell said the investigation was not actually about the Fed’s renovation but were “pretexts” meant to pressure the central bank to lower interest rates.

"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,” Powell said at the time.

Pirro said the Federal Reserve’s inspector general would investigate cost overruns in the multi-billion-dollar renovation of the central bank’s headquarters in Washington. She had claimed the renovation was her reason for investigating Powell.

He and others had said that the real reason for Pirro’s probe was to pressure Powell and the Fed to lower interest rates as Trump wanted.

she told on Wednesday that she was committed to continuing the probe, which had been crippled by a federal judge’s ruling quashing subpoenas her office issued to the Fed.

Sen. Thom Tillis, a North Carolina Republican and Banking Committee member, had put an effective hold on the full Senate voting on Warsh’s nomination unless the criminal investigation ended.

“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said in her X post on Friday.

“I have directed my office to close our investigation as the IG undertakes this inquiry."

“Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”she added.

It comes as the White House received bipartisan criticism over the investigation, including from Thom Tillis, the Republican senator who said he would block the nomination of Kevin Warsh, Trump’s pick to replace Powell, until the justice department ends its investigation.

Move removes a key obstacle for Kevin Warsh as scrutiny of the Fed shifts to internal oversight