The Justice Department has concluded its investigation into cost overruns during the renovations at the Federal Reserve under the leadership of chairman Jerome Powell, as announced by U.S. Attorney Jeanine Pirro on Friday. Pirro has directed the Inspector General of the Federal Reserve to examine the building costs for accountability to American taxpayers. She emphasized the importance of a comprehensive report to address the concerns that prompted the issuance of subpoenas by her office. While indicating a willingness to restart a criminal investigation if warranted, Pirro also mentioned that a federal judge recently blocked subpoenas to the Fed’s board of governors, citing improper pressures related to President Donald Trump’s requests to lower interest rates quickly or resign.
Jerome Powell’s term as chair is scheduled to end on May 15. The investigation led by Pirro influenced Powell’s decision to remain a Fed governor until 2028, aligning with the end of Trump’s presidency. The Trump administration’s threats, including the criminal investigation, have caused potential delays in the Senate confirmation of Kevin Warsh, Trump’s nominee to succeed Powell. Republican Senator Thom Tillis has expressed concerns about the probe undermining the Fed’s independence and has pledged to block Warsh’s confirmation until the investigation is resolved.
The investigation into renovation costs has drawn criticism from Democrats and former Federal Reserve leaders, who view it as a tactic to undermine the Fed’s autonomy from the White House. President Trump’s inaccurate statements regarding renovation costs have been corrected by Powell in the past. Notably, three of the Fed’s current governors were appointed by former President Joe Biden, including Lisa Cook, whose dismissal has been sought by the Trump administration and is pending in the U.S. Supreme Court.
Senator Elizabeth Warren has criticized Friday’s announcement, labeling it as a maneuver to pave the way for Kevin Warsh’s nomination. Warren highlighted concerns about the pursuit of Lisa Cook and the potential revival of a criminal probe into Powell. In response, Warsh emphasized the importance of monetary policy independence and clarified that he had not made any commitments to Trump regarding interest rate cuts. Warsh blamed the current inflation surge on the central bank under Powell’s leadership, citing its adverse effects on U.S. households.
The developments surrounding the investigation into Federal Reserve chair Jerome Powell have raised questions about the institution’s independence in shaping the country’s monetary policy.
