DOJ ends Powell probe, boost for Trump’s Fed pick Warsh
The Justice Department dropped its criminal investigation into Federal Reserve Chairman Jerome Powell on Friday, removing a major hurdle for the Senate to nominate Kevin Warsh to replace President Donald Trump.
U.S. Attorney Jeanine Pirro, the lead federal prosecutor for the District of Columbia, said: a post on x He said he abandoned the investigation. His announcement came three days after Warsh testified before the Senate Banking Committee on his nomination.
Pirro said as recently as Wednesday that he was determined to continue the criminal investigation, which was disrupted by a federal judge’s decision quashing his office’s subpoenas to the Fed.
You. Thom Tillis, North Carolina Republican and Banking Committee The member had the power to cast an effective vote on the full Senate to confirm Warsh as Fed chair unless the criminal investigation ended.
In his announcement that he was dropping the investigation, Pirro said that instead of his office continuing the investigation, the Federal Reserve inspector general “was asked this morning to investigate cost overruns in the multibillion-dollar renovation of the central bank’s headquarters in Washington.”
He claimed that the renewal, which the Fed inspector general has been investigating since last summer, and Powell’s testimony to the Banking Committee on the project were the reason he was investigating the Fed chief.
Federal Reserve Chairman Jerome Powell speaks at a news conference following the meeting of the Federal Open Market Committee at the Federal Reserve on October 29, 2025 in Washington, DC.
Alex Wong | Getty Images
Powell and others have said the real reason Pirro is investigating is to pressure him and the Fed to lower interest rates as Trump wants.
Powell asked the inspector general to review the renovation project in July after Trump criticized the project’s cost.
He noted at the time that the inspector general conducted an audit in 2021 to evaluate the Fed’s Board of Governors’ “process for planning and managing multiple renovation projects, as well as the process of procuring services under various renovation-related contracts.”
A spokesperson for the inspector general told CNBC on Friday that the inspector general is “actively working to complete the Board’s evaluation of the building renovation project” and will make the results of that investigation available to the public and Congress when completed.
Pirro’s warning
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said in the X post.
“I expect a comprehensive report shortly, and I am confident that the outcome will help definitively resolve the questions that prompted this office to issue the subpoena,” he said.
“Accordingly, I have instructed my office to close our investigation while the IG assumes this investigation,” Pirro said.
“However, remember that I will not hesitate to reopen the criminal investigation if the facts warrant.”
Federal Reserve presidential candidate Kevin Warsh arrives for a Senate Banking, Housing and Urban Affairs Committee confirmation hearing at the Dirksen building on April 21, 2026.
Tom Williams | Cq-roll Call, Inc. | Getty Images
White House spokesman Kush Desai“American taxpayers deserve answers about the Federal Reserve’s financial mismanagement, and the more powerful officials of the Office of Inspector General have it in the best position to get to the bottom of the matter,” he said in a statement.
“The White House is as confident as ever that the Senate will quickly confirm Kevin Warsh as the next Federal Reserve Chairman, who will finally restore competence and confidence in the Fed’s decision-making process,” Desai said.
The Federal Reserve declined to comment.
CNBC requested comment from Warsh and Tillis, Pirro’s office.
Senate Banking Committee Chairman Tim Scott, R.S.C. “As I have said all along, the American people deserve answers for the Federal Reserve’s unacceptable cost overruns,” he said in a statement. he said.
“These serious concerns warrant review, and I am pleased that this matter continues to be received. I welcome the Inspector General’s review and look forward to a full explanation of how these costs got out of control,” Scott said. “The Senate Banking Committee will continue to conduct aggressive oversight to ensure taxpayers receive the transparency and accountability they deserve, and I urge the Inspector General to brief the Committee on its findings within the next 90 days.”
“The Federal Reserve should focus on price stability, not costly mismanagement,” he said.
Warren pushback
“Let’s explain what the Justice Department announced today: They failed to stop the ridiculous criminal investigation into Governor Lisa Cook, while threatening to reopen the bogus criminal investigation into Fed Chair Powell at any time,” Warren said.
Last summer, Trump tried to fire Cook, who, like Powell, had resisted demands for a rate cut, after an official in his administration alleged that he had lied about mortgage applications.
Cook denied these allegations and filed a lawsuit to prevent his termination. He remained on the Fed’s Board of Governors while the Supreme Court considered his case.
“Anyone who believes Donald Trump’s corrupt plan to take over the Fed is over is deluding themselves,” Warren said. “The Senate should not proceed with the nomination of Kevin Warsh.”
— CNBC’s Jeff Cox, Kevin Breuninger, matt petersonBetsy Spring and Emily Wilkins contributed to this article.
