The Department of Justice has officially closed its criminal investigation into Federal Reserve Chairman Jerome Powell, ending a controversial probe that centered on costly renovations to the central bank’s Washington headquarters.
The investigation began after a political firestorm erupted over the Fed’s multi-billion dollar renovation project of two historic buildings near the National Mall. The controversy started about a year ago when a New York Post article highlighted the project’s “lavish” amenities and its nearly $2.5 billion cost.
The timing coincided with then-President Trump’s public pressure campaign against Powell and the Fed to reduce interest rates. Elon Musk, who was leading the Trump administration’s Department of Government Efficiency at the time, immediately demanded an investigation. Republican senators, including Banking Committee Chairman Tim Scott, also accused the Fed of wasteful spending.
On June 24, 2025, Scott and other Banking Committee members wrote to Powell questioning renovation expenses they claimed included “rooftop garden terraces, ornate water features, new elevators that drop board members off directly in their VIP dining suite… rooftop Italian beehives” and other luxury features.
Powell appeared before the Senate Banking Committee the following day, testifying that reports about such extravagant amenities were false. Fed documents revealed the current budget exceeded the original 2020 allocation by approximately $1.1 billion, primarily due to post-pandemic inflation driving up material and labor costs. Additional expenses came from design modifications required by the national planning commission and unexpected issues like asbestos removal.
Federal Housing Finance Agency Director Bill Pulte escalated the situation on July 2, 2025, posting on social media that Powell’s testimony was misleading and warranted his removal from office “for cause.” He also demanded a Congressional investigation.
Office of Management and Budget Director Russell Vought joined the criticism on July 10, 2025, demanding Powell explain the renovations and suggesting the Fed had bypassed proper approval processes.
Powell responded on July 14, 2025, with a comprehensive explanation to Scott and top Banking Committee Democrat Elizabeth Warren. The Fed also published detailed cost breakdowns on its website, and Powell requested the Fed’s Inspector General conduct a new review of the project.
Three days later, Powell sent the same information to Vought. On July 24, 2025, Trump visited the construction site with Pulte, Vought, and Senators Scott and Thom Tillis for a Powell-guided tour, using the opportunity to again push for interest rate reductions.
In November 2025, U.S. Attorney for the District of Columbia Jeanine Pirro launched a criminal investigation focusing on alleged false statements in Powell’s July Senate testimony, according to court documents unsealed months later.
Powell revealed the DOJ investigation and related subpoenas in an unusual Sunday evening video statement on January 11, 2026, describing it as unprecedented intimidation designed to give the president influence over Fed monetary policy decisions.
The probe immediately drew widespread criticism as an attack on Fed independence. Senator Tillis announced he would block any Fed nominee while the investigation continued, with other Republican lawmakers expressing similar concerns.
Despite the ongoing investigation, Trump nominated Kevin Warsh as the next Fed chair on January 30, 2026, to replace Powell when his term expires May 15. Tillis maintained his blocking position.
A federal judge dealt a significant blow to the investigation on March 13, 2026, blocking the DOJ’s subpoenas and agreeing with Powell that the probe represented an improper attempt to pressure the central bank into cutting rates. Pirro announced plans to appeal the decision.
Powell declared his intentions on March 18, 2026, stating: “I have no intention of leaving the Board until the investigation is well and truly over, with transparency and finality.”
Prosecutors from Pirro’s office made an unexpected visit to the Fed’s renovation site on April 14, 2026, but were denied access.
During Warsh’s confirmation hearing on April 21, 2026, Tillis reiterated his position blocking the nomination. The next day, Pirro insisted her investigation would continue, with Trump expressing support, saying “we have to find out” how the building became so expensive.
On April 24, 2026, Pirro announced she would close the investigation and transfer it to the Fed’s Inspector General, who had already begun their own review at Powell’s request nine months earlier. “I will not hesitate to restart a criminal investigation should the facts warrant doing so,” she added.
