WASHINGTON — The Department of Justice dropped its investigation Friday of the Federal Reserve and Chair Jerome Powell over building renovation costs, a move that could open the door for new Fed leadership next month — and signaled a victory for North Carolina Sen. Thom Tillis.
U.S. Attorney Jeanine Pirro said her office closed the probe after a request to the Fed’s inspector general to examine the cost overruns.
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers. I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas,” Pirro wrote on X just after 10 a.m. Eastern.
Pirro said she “will not hesitate to restart a criminal investigation should the facts warrant doing so.”
Powell, whose term expires in May, has been the target of repeated public criticism from President Donald Trump, who threatened to fire the central bank’s chair if he did not lower interest rates.
The Trump administration’s criminal inquiry into Powell for a $2.5 billion renovation project at the Fed’s offices has been eyed with suspicion, including from his own party.
Tillis, R-N.C., said he would not vote for Trump’s pick to replace Powell, former Fed Board Governor Kevin Warsh, unless the administration dropped its “bogus” investigation.
A favorable vote by Tillis on the closely divided Senate Committee on Banking, Housing and Urban Affairs is necessary to advance Warsh’s nomination, as all panel Democrats oppose him.
Tillis’s office did not immediately respond for comment.
A federal judge last month blocked the administration’s subpoenas to probe the Fed and Powell.
The Department of Justice declined to comment and referred States Newsroom to Pirro’s social media post.
A White House official reaffirmed Pirro’s announcement Friday.
“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. The White House remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision-making,” White House spokesperson Kush Desai told States Newsroom in a statement.
Sen. Elizabeth Warren, D-Mass., issued a statement dismissing the DOJ’s announcement as “an attempt to clear the path for Senate Republicans to install President Trump’s sock puppet Kevin Warsh as Fed Chair.”
“Let’s be clear what the Justice Department announced today: they threatened to restart the bogus criminal investigation into Fed Chair Powell at any time while failing to drop their ridiculous criminal probe against Governor (Lisa) Cook. Anyone who believes Donald Trump’s corrupt scheme to take over the Fed is over is fooling themselves,” she wrote on X and Bluesky late Friday morning, referring to Trump’s abrupt August firing of Feb Board Governor Cook over alleged financial fraud.
Cook successfully challenged her firing in two lower courts. The U.S. Supreme Court is reviewing whether Trump legally dismissed Cook.
Trump, who routinely posts about news of the day on his own social media platform Truth Social, had not commented on the announcement as of 12:30 p.m. Eastern.
During an unrelated Oval Office event Thursday, Trump sidestepped a question about what he hoped to learn from Pirro’s investigation into Powell and the Fed.
Instead, Trump responded by saying he could have completed the Fed’s Washington, D.C., headquarters renovation for $25 million and “had money left over.”
“On top of that, he’s been terrible on interest rates because he should have lowered interest rates. That’s why call him Jerome ‘too late.’ ‘Too late’ — that’s his nickname — Jerome ‘too late’ Powell. He likes me a lot,” Trump said.
Jennifer Shutt contributed to this report.
