The United States Department of Justice has said it is dropping a criminal investigation into Jerome Powell, clearing a key obstacle ahead of Senate confirmation proceedings for his potential successor.
US Attorney Jeanine Pirro announced on Friday that she had ordered the probe closed, stating that the Federal Reserve’s inspector general would instead review alleged renovation cost overruns at the central bank’s headquarters.
She, however, noted that the Justice Department could reopen the case if new evidence emerges.
The investigation, which had drawn criticism from former central bank officials and lawmakers, came amid heightened political tensions following President Donald Trump’s repeated criticism of the Federal Reserve over interest rate decisions and his personal attacks on Powell.
Powell’s current term as Fed chair is due to end on May 15, with the closure of the probe expected to smooth the path for the Senate confirmation of Trump’s nominee, Kevin Warsh.
The White House welcomed the development, with Press Secretary Karoline Leavitt urging lawmakers to expedite Warsh’s confirmation, describing him as a strong candidate to lead the central bank.
However, Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, warned that the decision does not eliminate broader political pressure on the Fed, arguing that the investigation had been politically motivated.
Powell, who first became Fed chair in 2018 and was later reappointed under former President Joe Biden, has previously indicated he would remain on the Federal Reserve’s Board of Governors until any related investigations are fully resolved.
It remains unclear whether he will continue in that role following the closure of the probe, with attention now shifting to the Federal Reserve’s upcoming policy meeting and press conference next week.
