Justice Department drops criminal probe of Fed chair Powell, likely clearing way for Warsh
WASHINGTON — The Justice Department has ended its probe into Federal Reserve chair Jerome Powell, clearing a major roadblock to the confirmation of his successor, Kevin Warsh.
U.S. Attorney for the District of Columbia Jeannine Pirro said on X that her office was ending its probe into the Fed’s extensive building renovations because the Fed’s Inspector General would scrutinize them instead.
The decision ends an investigation, one of several undertaken by the Justice Department into President Trump’s perceived adversaries, that for months had failed to gain traction as prosecutors struggled to articulate a basis to suspect criminal conduct.
A prosecutor handling the case conceded at a closed-door court hearing in March that the government hadn’t yet found any evidence of a crime, and a judge subsequently quashed subpoenas issued to the Federal Reserve. The judge, James Boasberg, said prosecutors had produced “essentially zero evidence” to suspect Powell of a crime. Boasberg prosecutors’ justification for the subpoenas as “thin and unsubstantiated.”
More recently, prosecutors made an unannounced visit to a construction site at the Fed’s headquarters but were turned away, drawing a rebuke from a defense attorney in the case who called the maneuver “not appropriate.”
The move could lead to a swift confirmation vote by the Senate for Warsh, a former top Fed official whom Trump, a Republican, nominated in January to replace Powell, whose term as chair ends May 15. Sen. Thom Tillis, a North Carolina Republican, has said he would oppose Warsh until the investigation was resolved, effectively blocking his confirmation.
Warsh said Tuesday that he never promised the White House that he would cut interest rates, even as the president renewed his calls for the central bank to do so.
“The president never once asked me to commit to any particular interest rate decision, period,” Kevin Warsh, a former top Fed official, said under questioning by 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.”
Warsh’s comments came just hours after Trump, in an interview on CNBC, was asked if he would be disappointed if Warsh didn’t immediately cut rates and responded, “I would.”
