Washington — Federal prosecutors are ending their criminal investigation into Federal Reserve Chairman Jerome Powell, U.S. Attorney Jeanine Pirro announced, clearing a key obstacle for the confirmation of Kevin Warsh, President Trump’s pick to take over as head of the central bank’s Board of Governors.
Pirro wrote on X that the Fed’s inspector general has instead been asked to look into potential cost overruns in the central bank’s renovation of its Washington, D.C., headquarters.
“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry,” she wrote. “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”
Pirro said that she expects the inspector general’s office to provide her with a “comprehensive report” on its findings and said she is “confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.”
Powell’s tenure as chairman of the central bank’s Board of Governors is set to end in May, and the president nominated Warsh to succeed him. But Warsh’s path to the Fed faced a key hurdle, as Republican Sen. Thom Tillis of North Carolina said he would not vote to confirm any nominee until the Fed investigation was dropped.
Warsh testified before the Senate Banking Committee on Tuesday and pledged that the central bank would remain “strictly independent” in its monetary policy decisions.
The Fed’s inspector general is Michael Horowitz, who served in the role at the Justice Department and reviewed the origins of the FBI’s investigation into the 2016 election and alleged ties between the Trump campaign and Russia.
ABC News first reported Friday that the Justice Department was set to drop the Powell probe. The Justice Department did not immediately respond to a request for comment. The Fed declined to comment.
The announcement comes days after prosecutors from Pirro’s office made an unannounced visit to the Fed’s headquarters and attempted to gain access to the building’s ongoing renovations. The two prosecutors and an investigator from the U.S. Attorney’s Office in D.C. were denied entry and given contact information for the Fed’s legal team.
The investigation into Powell burst into public view in January when the chairman revealed in a video that the Fed had received grand-jury subpoenas as part of an ongoing criminal investigation. The subpoenas threatened an indictment related to Powell’s testimony before the Banking Committee in June 2025 about the years-long project to renovate the Fed’s offices.
But in March, Chief Judge James Boasberg of the U.S. District Court for the District of Columbia quashed the pair of subpoenas, saying they were a pretext to pressure Powell into voting to lower interest rates or resigning.
The Justice Department asked the judge to reconsider his decision, but he denied that request earlier this month. While Pirro said in response to Boasberg’s March ruling that the Justice Department would appeal that initial decision, it did not ask the federal appeals court in Washington to review it.
The probe involving Powell came amid Mr. Trump’s frequent airing of frustrations with him for declining to rapidly slash interest rates. The president often hurls insults at the central bank’s chair, calling him “a jerk” and “too late.” Mr. Trump threatened to fire Powell earlier this month.
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