The investigation into cost overruns during the renovations at the Federal Reserve under Chairman Jerome Powell is being closed by the Justice Department, as confirmed by U.S. Attorney Jeanine Pirro on Friday. Pirro has now requested the Inspector General of the Federal Reserve to examine the building costs and ensure accountability to American taxpayers. In a social media post, Pirro emphasized the importance of a comprehensive report to resolve outstanding issues that led to subpoenas being issued. However, she stated that a criminal investigation could be reopened if necessary.
A federal judge recently blocked subpoenas to the Fed’s board of governors, ruling that they were improperly issued to pressure Powell on interest rates at the behest of President Donald Trump. Despite this setback, Pirro had planned to appeal the decision and continue the probe. Powell’s term as chair is expected to conclude on May 15.
The investigation led by Pirro had influenced Powell’s decision to remain as a Fed governor until 2028, aligning with the end of Trump’s presidency. This departure coincides with the tradition of Fed chiefs leaving the board after their leadership terms conclude.
The Trump administration’s actions, including the criminal investigation, were causing delays in the Senate confirmation of Kevin Warsh, Trump’s nominee to succeed Powell. Republican Senator Thom Tillis criticized the probe as an attack on the Fed’s independence and vowed to block Warsh’s confirmation until the investigation is resolved.
Critics, including Democrats and former Federal Reserve leaders, viewed the investigation into renovation costs as a tactic to undermine the Fed’s autonomy from the White House. Trump’s inaccurate statements regarding renovation costs had drawn criticism, with Powell correcting him publicly. Three of the current Fed governors were appointed by President Joe Biden, including Lisa Cook, whose dismissal is being pursued by the Trump administration.
Senator Elizabeth Warren denounced the recent announcement as an attempt to clear the path for Trump’s preferred nominee, Kevin Warsh. Warren highlighted concerns about potential interference in Fed affairs and criticized the pursuit of Powell’s investigation. Warsh emphasized the importance of monetary policy independence during his Senate testimony and clarified that he had made no commitments to Trump regarding interest rates.
Warsh also attributed the inflation surge post-COVID-19 to the central bank under Powell, suggesting ongoing challenges for American households.
