WASHINGTON — Federal authorities have concluded their criminal investigation into Federal Reserve Chair Jerome Powell, eliminating a significant barrier to the Senate confirmation of his designated replacement, Kevin Warsh.
On Friday, District of Columbia U.S. Attorney Jeannine Pirro announced via social media that her office was concluding its examination of the Federal Reserve’s extensive facility renovation projects, transferring oversight responsibilities to the Fed’s inspector general instead.
This development may accelerate Senate approval for Warsh, a former senior Federal Reserve official selected by President Donald Trump in January to succeed Powell. Powell’s chairmanship expires on May 15. Republican Senator Thom Tillis of North Carolina had previously indicated he would vote against Warsh’s confirmation while the investigation remained active, creating a potential confirmation roadblock.
With the inquiry now closed, the leadership change at the nation’s most influential central banking institution could move forward rapidly. Republican senators expressed support for Warsh during Tuesday’s hearing, while Democratic members raised concerns about his autonomy from Trump, questioned transparency regarding his financial assets, and criticized what they characterized as inconsistent positions on interest rate policy. However, Trump’s earlier Federal Reserve board appointee, Stephen Miran, received full Senate confirmation within just 13 days of his nomination.
This investigation represented one of several Justice Department inquiries targeting individuals Trump considers political opponents. The case had struggled to gain momentum for months as federal prosecutors found difficulty establishing grounds for suspected criminal activity.
During a private court proceeding in March, a prosecutor acknowledged that investigators had not discovered evidence of criminal wrongdoing. Subsequently, Judge James Boasberg invalidated subpoenas directed at the Federal Reserve, stating prosecutors had presented “essentially zero evidence” suggesting Powell committed crimes. Boasberg criticized the prosecution’s rationale for the subpoenas as “thin and unsubstantiated.”
In a recent development, prosecutors conducted an unexpected visit to a construction location at Fed headquarters but were denied access, prompting criticism from a defense lawyer who deemed the action “not appropriate.”
During Tuesday’s Senate hearing, Warsh stated he had never committed to the White House regarding interest rate reductions, despite the president’s continued advocacy for such cuts.
“The president never once asked me to commit to any particular interest rate decision, period,” Warsh testified before the Senate Banking Committee. “Nor would I ever agree to do so if he had. … I will be an independent actor if confirmed as chair of the Federal Reserve.”
These remarks followed Trump’s CNBC interview earlier that day, where he expressed potential disappointment if Warsh didn’t immediately implement rate cuts, stating “I would.”
The decision to terminate this investigation marks an unusual retreat for a Justice Department that has pursued aggressive, though largely unsuccessful, prosecutions of public figures who have drawn presidential criticism over the past year.
Robert Hur, legal counsel for the Federal Reserve Board of Governors, did not respond to Friday requests for comment.
