The Department of Justice (DOJ) has ended its criminal investigation into Federal Reserve Chair Jerome Powell, removing a major obstacle to President Donald Trump’s nomination of Kevin Warsh to lead the central bank.
The decision was announced Friday by Jeanine Pirro, who said her office was closing the probe and shifting further review to the Federal Reserve’s inspector general.
Pirro had previously stated she intended to continue the investigation.
The case focused on cost overruns tied to the Federal Reserve’s multibillion-dollar headquarters renovation project in Washington, D.C.
Pirro said the inspector general had been asked to examine the matter and has the authority to hold the Federal Reserve accountable to taxpayers.
She added that she could reopen a criminal investigation later if facts warranted it.
The move is politically significant because North Carolina Sen. Thom Tillis (R) had effectively blocked a full Senate confirmation vote on Warsh unless the Powell investigation was dropped.
With the probe now closed, a major barrier to Warsh’s confirmation has been removed.
Warsh testified before the Senate Banking Committee earlier this week regarding his nomination.
The White House quickly praised the DOJ decision.
Spokesman Kush Desai said taxpayers deserve answers about alleged Federal Reserve mismanagement and said the inspector general was better positioned to conduct the review.
He added that the administration remains confident the Senate will swiftly confirm Warsh as the next Federal Reserve chairman.
The Federal Reserve declined to comment.
Powell and allies had argued the real reason for the criminal probe was pressure from Trump and his allies to force lower interest rates, per CNBC.
Trump has repeatedly criticized Powell over rate policy and has sought a more aggressive easing stance from the Fed.
Powell previously asked the inspector general in July 2025 to review the renovation project after public criticism over costs.
That means an oversight review was already underway before the criminal probe was closed.
Republican Senator Tim Scott had also argued that Congress, rather than prosecutors, should handle the issue.
Scott said Powell appeared incompetent rather than criminal and suggested lawmakers could establish permanent oversight of construction projects under banking committee jurisdiction.
Democrats sharply criticized the move.
Senator Elizabeth Warren said dropping the Powell investigation was an attempt to clear the path for what she called Trump’s preferred nominee.
She accused the administration of trying to politically control the Federal Reserve and warned that the Senate should not proceed with Warsh’s nomination.
The broader stakes are substantial.
The Federal Reserve controls interest rates, inflation strategy, and monetary policy, affecting mortgages, business lending, employment, and markets.
Replacing Powell with Warsh would likely be one of Trump’s most consequential economic personnel moves.
