The investigation into cost overruns in the Federal Reserve renovations under chairman Jerome Powell is being closed by the Justice Department, according to U.S. Attorney Jeanine Pirro. Pirro has requested the Inspector General of the Federal Reserve to examine the building costs to ensure accountability to American taxpayers. She emphasized the importance of a thorough report and stated that a criminal investigation could be restarted if necessary.
A federal judge recently blocked subpoenas to the Fed’s board of governors, ruling that they were improperly issued to pressure Powell to comply with President Donald Trump’s demands. The probe had affected Powell’s decision on whether to remain in his governor’s seat until 2028. The threats from the Trump administration, including the criminal investigation, were causing delays in the Senate confirmation of Kevin Warsh as Powell’s successor.
Senator Thom Tillis criticized the probe as an attack on the Fed’s independence and vowed to block Warsh’s confirmation until it is dismissed. Democrats and former Federal Reserve leaders also condemned the investigation as an attempt to undermine the panel’s autonomy from the White House. Trump’s incorrect statements on renovation costs have been refuted by Powell in the past.
The Trump administration’s efforts to dismiss Fed governor Lisa Cook, who was appointed by President Joe Biden, are pending in the U.S. Supreme Court. Senator Elizabeth Warren criticized the announcement of the investigation closure, accusing it of being a ploy to facilitate Warsh’s nomination. Warsh emphasized the importance of monetary policy independence and denied making any promises regarding interest rate cuts to Trump.
During a Senate hearing, Warsh blamed the Federal Reserve under Powell for contributing to inflation post-COVID-19, which he argued was impacting U.S. households negatively.
