The Department of Justice will drop its probe into Federal Reserve Chair Jerome Powell, US Attorney Jeanine Pirro announced Friday.
She said the Inspector General for the Fed has been asked to “scrutinize the building costs overruns — in the billions of dollars — that have been borne by taxpayers,” and will take over the investigation from the DOJ. This means the possibility of criminal charges against Powell has been dropped for now.
The department launched a probe in January into Powell over the Fed’s alleged mishandling of construction funds at the central bank’s Washington DC buildings.
“Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so,” Pirro said on X. She added that she expects “a comprehensive report in short order” from the Inspector General and is “confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.”
The Fed — and Powell specifically — has faced ongoing scrutiny from the Trump administration. When the probe was announced in January, Powell posted a video online, saying that, “No one — certainly not the chair of the Federal Reserve — is above the law. But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
The Fed declined to comment to Business Insider on Friday.
The chair’s term is set to end on May 15, though he indicated that he may remain on the Federal Open Market Committee as a governor.
Warsh is one step closer to confirmation
Trump nominated former Wall Street executive Kevin Warsh as Powell’s successor in February, and a hearing before the Senate Committee on Banking, Housing, and Urban Affairs was held on April 21.
The largest obstacle to Warsh’s confirmation has been Sen. Thom Tillis, a North Carolina Republican, who has repeatedly said he would block any potential Powell replacement until the Justice Department ended its probe. Tillis, along with other lawmakers across the aisle, has expressed concern that the probe was political overreach — and a threat to future Fed independence.
Following Warsh’s confirmation hearing, Tillis renewed his push for an off-ramp that would allow him to drop his objection and for Warsh to proceed to likely confirmation. Tillis told reporters that one idea would be for one or more congressional committees to take up the investigation into the updates to the Fed’s headquarters in Washington.
“I not only think it’s a good off-ramp, but I also think it’s good governance,” Tillis told reporters after the confirmation hearing, per Politico.
Pirro’s statement isn’t what Tillis outlined, but Federal Reserve Inspector General Michael E. Horowitz is widely respected by members of both parties on Capitol Hill. Tillis’ office didn’t immediately respond to a request for comment from Business Insider.
In 2025, Powell asked Horowitz to look into the ballooning cost of renovations at the Fed’s headquarters. Horowitz’s website already lists such an investigation as part of its ongoing work.
“We are assessing the Board’s oversight of its Marriner S. Eccles Building and 1951 Constitution Avenue Building Renovation Project, including the associated costs,” the description reads. “Our scope will include a focus on the key factors contributing to the cost estimate increases, including assessing whether discretionary design features contributed materially to those increases.”
Sen. Tim Scott, a Republican senator from South Carolina who chairs the Banking Committee, said in a statement that he would invite Horowitz to brief Congress on his findings within the next 90 days.
The committee and Senate have yet to vote on Warsh’s nomination, though he is likely to be greenlit. Warsh would be the wealthiest Fed chair in history, with financial disclosures showing that he is worth over $100 million.
Powell will hold the chair seat for one more rate decision — or until the next chair is confirmed. The FOMC is set to meet this coming week and is expected to hold rates steady.
This is a developing story, check back for updates.
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