Trump's Justice Department drops investigation of Fed chair Jerome Powell

Lead

The US Justice Department has dropped its investigation into Federal Reserve Chair Jerome Powell over cost overruns in renovations of the central bank's Washington headquarters, a move that clears a major hurdle to the confirmation of his successor, Kevin Warsh.

US Attorney for the District of Columbia Jeanine Pirro announced the decision on Friday, saying the probe would be taken over by the Fed's internal watchdog, the Office of Inspector General. Pirro, a Trump ally, said in a social media post that the inspector general "has the authority to hold the Federal Reserve accountable to American taxpayers." She added that she expects "a comprehensive report in short order" and is confident the outcome will help resolve the questions that led her office to issue subpoenas.

Coverage Comparison

The development was reported by multiple international outlets, including Reuters (via ABC Australia), Al Jazeera, the BBC, Deutsche Welle, and the South China Morning Post. All sources agree on the core facts: the investigation was closed, the inspector general will take over scrutiny of the renovations, and the decision removes an obstacle to Warsh's confirmation. Some reports, such as those from Deutsche Welle and Al Jazeera, framed the closure as a positive development for Warsh's confirmation, while the BBC emphasized the long-running feud between Trump and Powell. All outlets noted the investigation's origins in Trump's criticism of the renovation costs.

Key Claims

• Investigation ended, transferred to inspector general: All five sources report that US Attorney Jeanine Pirro ended the Justice Department probe into Powell and asked the Fed's inspector general to examine the renovation cost overruns instead. Pirro said the inspector general has the authority to hold the Federal Reserve accountable to taxpayers, according to Al Jazeera and Deutsche Welle.

• Powell's term ends May 15: Multiple sources, including the BBC and Deutsche Welle, confirm that Powell's term as chair ends on May 15. Kevin Warsh, a former Fed official, is Trump's nominee to replace him, as reported by all sources.

• Senator Thom Tillis's opposition lifted: Senator Thom Tillis, a Republican from North Carolina, had said he would oppose Warsh until the investigation was resolved, effectively blocking his confirmation. This was reported by ABC Australia, Al Jazeera, and the BBC. With the investigation closed, Tillis's stated condition appears to have been met, potentially allowing a swift confirmation vote.

• Judge's earlier criticism: Chief US District Judge James Boasberg had previously blocked subpoenas issued to the Fed's Board of Governors, saying prosecutors had shown "essentially zero evidence" that Powell committed a crime. This was reported by Deutsche Welle and Al Jazeera. One outlet, Deutsche Welle, also reported that a prosecutor conceded in a closed-door hearing in March that the government had not found evidence of a crime.

• Warsh's confirmation hearing: During a Senate hearing on Tuesday, Republicans praised Warsh while Democrats questioned his independence from Trump and his past statements on interest rates, according to ABC Australia. Warsh said during the hearing that he never promised the White House he would cut interest rates, as reported by Reuters (via ABC Australia).

Perspectives

The Justice Department's decision is widely seen as a victory for the Trump administration, which has long criticized Powell and the Fed's spending. White House spokesman Kush Desai said taxpayers deserve answers about the Fed's fiscal management and expressed confidence that the Senate will swiftly confirm Warsh, according to Reuters. The move also aligns with the administration's broader efforts to assert control over independent agencies, a theme noted in several reports.

Supporters of Powell and critics of the investigation argue that the probe was politically motivated. Judge Boasberg's ruling, which called the subpoenas "thin and unsubstantiated," lends weight to this view. Democrats on the Senate Banking Committee have also questioned Warsh's independence from Trump, suggesting that the end of the investigation does not necessarily end the political tensions surrounding the Fed's leadership.

The Fed itself has not publicly commented on the investigation's closure. The renovation project, which includes two buildings—the Eccles Building and 1951 Constitution Avenue—has been described by the Fed as necessary for health and safety, including asbestos removal. The Fed has said the renovations will reduce costs over time, though Trump has criticized the projected $3.1 billion price tag as excessive.