The Justice Department has concluded its investigation into excessive expenses during the Federal Reserve renovations under the leadership of Chairman Jerome Powell, as announced by U.S. Attorney Jeanine Pirro on Friday. Pirro disclosed that the Inspector General of the Federal Reserve has been tasked with reviewing the construction costs to ensure accountability to American taxpayers. She emphasized the importance of a comprehensive report from the Inspector General and expressed confidence that it would address the concerns that led to the issuance of subpoenas.
Although the investigation has been closed, Pirro made it clear that she is prepared to reopen a criminal investigation if new evidence warrants it. Previously, a federal judge had blocked subpoenas to the Fed’s board of governors, deeming them an attempt to pressure Powell to comply with President Donald Trump’s demands to lower interest rates swiftly or resign. This had prompted Pirro to challenge the ruling and continue the inquiry, with Powell’s term ending on May 15.
The investigation by Pirro had influenced Powell’s stance on remaining in a Fed governor role until 2028, aligning with the end of Trump’s presidency. Typically, Federal Reserve chairs step down from the board at the conclusion of their leadership terms. The scrutiny and threats against Powell from the Trump administration, including the criminal investigation, had the potential to delay the confirmation of Kevin Warsh as the nominee to succeed Powell.
Senator Thom Tillis, a Republican member of the Senate’s banking committee, criticized the investigation as an attack on the Fed’s independence and pledged to block Warsh’s confirmation until the matter is resolved. Meanwhile, Democrats and former Federal Reserve leaders condemned the probe as a tactic to undermine the Fed’s autonomy from the White House. They highlighted Trump’s inaccuracies regarding renovation costs and criticized the attempt to influence the central bank’s operations.
Amidst the controversy, Senator Elizabeth Warren accused the announcement of serving as a ploy to facilitate Warsh’s nomination and criticized the pursuit of Lisa Cook by the Trump administration. Warsh, who emphasized the importance of monetary policy independence, clarified that he had not made any commitments to Trump regarding interest rate adjustments. In a Senate hearing, he attributed the inflation surge post-COVID-19 to the central bank under Powell’s leadership, citing its adverse effects on American households.
