The Department of Justice announced Friday it has closed its criminal investigation into Federal Reserve Chair Jerome Powell's handling of renovations at the central bank, a move that effectively removes a major political hurdle for the confirmation of Kevin Warsh as the next Fed chair.
U.S. Attorney for the District of Columbia Jeanine Pirro stated on social media that she has referred the matter to the Fed's inspector general, who will conduct a separate inquiry into the renovations. Pirro emphasized that the IG has broader authority to hold the Fed accountable to taxpayers and that she expects a comprehensive report soon.
"The IG has the authority to hold the Federal Reserve accountable to American taxpayers. I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas," Pirro wrote. She added that she would not hesitate to restart a criminal investigation if warranted.
The decision comes after retiring Sen. Thom Tillis (R-N.C.) had blocked any vote on Trump's Fed nominees until the DOJ wrapped up its probe, which he dismissed as a political pressure campaign. Tillis, a member of the Senate Banking Committee, has the power to stall nominees given the narrow 13-11 GOP majority on the panel. He praised Warsh at his confirmation hearing earlier this week and pledged support once the investigation ended.
White House spokesperson Kush Desai expressed confidence in Warsh's path forward. "American taxpayers deserve answers about the Federal Reserve's fiscal mismanagement, and the Office of the Inspector General's more powerful authorities best position it to get to the bottom of the matter," Desai said. He added that the White House remains confident the Senate will quickly confirm Warsh to restore competence and confidence in Fed decision-making.
The closure of the criminal probe marks a significant shift in the political dynamics surrounding the Fed. Notably, the FBI recently probed a New York Times reporter over an article on Kash Patel's girlfriend, raising press freedom concerns—a separate but related example of the administration's aggressive investigative posture. Meanwhile, House Oversight Democrats have accused Republicans of stalling the Epstein investigation by canceling formal hearings, highlighting ongoing partisan battles over oversight.
Pirro's announcement effectively neutralizes a key sticking point that had threatened to derail Warsh's confirmation, which now appears on track for a Senate vote in the coming weeks. The inspector general's report, expected soon, will likely provide further clarity on the renovation costs and oversight lapses at the central bank.
