Justice Department prosecutors have dropped their investigation into Federal Reserve Chair Jerome Powell, U.S. Attorney for the District of Columbia Jeanine Pirro announced Friday in an X post.
The move may clear a hurdle blocking the nomination of Powell’s potential successor, former Fed Gov. Kevin Warsh, from proceeding through the Senate.
Warsh testified Tuesday in front of the Senate Banking Committee. But a key Republican on the panel, Sen. Thom Tillis of North Carolina, has long said he would not vote for any Fed nominee until the investigation against Powell is dropped.
Tillis had not issued a statement or commented on social media by deadline Friday. A “no” vote from him would deadlock Warsh’s nomination in the committee if the panel’s 11 Democrats were to also vote no.
One of those Democrats, Sen. Elizabeth Warren of Massachusetts, dismissed Friday’s DOJ move, in a statement seen Friday by Banking Dive, as “just an attempt to clear the path for Senate Republicans to install President [Donald] Trump’s sock [puppet] … as Fed Chair.”
Powell went public about the DOJ probe in January, and a district court judge quashed the subpoenas into the Fed chair, ruling that the investigation – purportedly centered on over-budget renovations at two central bank buildings – was a pretext to pressure Powell to resign. Pirro, until now, had refused to drop the investigation.
Trump administration officials flagged the $2.5 billion renovations last summer – eventually triggering a site visit by the president, alongside Powell.
But Trump has openly mocked Powell for years – in particular, for his reluctance to lower interest rates as quickly as the president would like. Powell’s term as Fed chair expires May 15. Powell has said he would continue in his role pro tempore if a successor is not confirmed by that time.
Pirro on Friday suggested her battle isn’t over.
“I will not hesitate to restart a criminal investigation should the facts warrant doing so,” she wrote in her post.
In the DOJ’s stead, the Fed’s inspector general “has been asked to scrutinize” the renovations at the central bank buildings, Pirro wrote Friday.
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” she wrote. “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.”
Warren, in her statement, however, noted that Pirro “threatened to restart the bogus criminal investigation into Fed Chair Powell at any time.”
“Anyone who believes Donald Trump’s corrupt scheme to take over the Fed is over is fooling themselves,” Warren wrote. “The Senate should not proceed with the nomination of Kevin Warsh.”
Trump, meanwhile, had not commented publicly by Friday afternoon on the end of the DOJ probe. However, he told a Semafor reporter Thursday that someone outside the DOJ could get the information sought by the investigation into Powell.
“You have to find out what went wrong,” Trump said Thursday. “It was beautiful, and they ripped it down, and probably because it cost so much to fix it.”
Pivoting to Powell’s job performance, Trump added: “On top of that, he’s been terrible on interest rates.”
