US Justice Department Closes Investigation into Fed Chairman Jerome Powell

Sat Apr 25 2026 03:38:56 GMT+0000 (Coordinated Universal Time)

The US Justice Department has ended its probe into Federal Reserve Chairman Jerome Powell regarding alleged building cost overruns, as it transitions to an internal investigation by the Fed's inspector general.

The US Justice Department has dropped its investigation into Jerome Powell, Chairman of the Federal Reserve, concerning alleged cost overruns on building renovations. Instead, an internal review will be conducted by the Fed's inspector general. Key Republican Thom Tillis has indicated he will only support Trump's nominee for Powell's replacement if the investigation is terminated. President Trump previously criticized the renovation costs, claiming they exceeded initial estimates.

The US justice department is dropping its investigation into the Federal Reserve chairman, Jerome Powell, over alleged building cost overruns.

US Attorney Jeanine Pirro stated instead that there would be an internal investigation led by the central bank's inspector general.

President Donald Trump has publicly criticized the costs associated with the Fed's building renovations, as part of a protracted dispute with Powell.

With Powell's term nearing its conclusion, the US Senate is currently deliberating on Trump's nominee for his successor, Kevin Warsh. Republican Senator Thom Tillis has withheld his support for Warsh unless the Trump administration drops its investigation into Powell.

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, White House spokesman Kush Desai commented.

Desai also expressed confidence that the Senate would quickly confirm Warsh as the next Federal Reserve Chairman, aiming to restore competence and confidence in Fed decision-making.

Pirro has mentioned on X that she would not hesitate to restart a criminal investigation if warranted by the facts.

The Fed has declined to issue further comments regarding the investigation.

The inspector general's office announced it is actively working to complete their review and will release findings to the public and Congress upon completion, although a timeline has not been specified.

Trump has maintained a contentious relationship with Powell, previously calling for interest rates to be reduced after returning to office and suggesting he might fire Powell, a move some view as potentially illegal.

Last summer, Trump decried the escalating renovation costs, which he claims would reach $3.1 billion, significantly above the Fed's initial forecast of $2.5 billion. The Fed argues that the renovations will ultimately result in long-term cost savings.

Powell took the unusual step of publicly addressing the department's actions after the Justice Department served the Fed with subpoenas and threatened criminal charges linked to his testimony regarding the renovations.

This marked Powell's first robust public rebuttal to Trump, emphasizing the importance of the Fed's independence in setting monetary policy devoid of political pressure.

Trump, who has consistently favored low-interest rates during his career in real estate, has voiced concerns that high rates could damage the economy.

The renovations to the Fed buildings are the first since their construction in the 1930s, involving crucial updates including the removal of hazardous materials.

Powell was originally nominated by Trump in 2017 for the role of Fed chair and plans to remain in position until Warsh's confirmation, should the Senate proceed smoothly with the nomination process.