The Department of Justice has terminated its criminal investigation into Federal Reserve Chair Jerome Powell, shifting oversight to the Fed’s Inspector General. US Attorney Jeanine Pirro announced the decision Friday, stating that the Inspector General will now scrutinize cost overruns in the Fed’s Washington DC construction projects, which have reportedly cost taxpayers billions of dollars.

Pirro emphasized that while criminal charges against Powell are no longer imminent, the option to reopen the investigation remains if evidence warrants it. 'I will not hesitate to restart a criminal investigation should the facts warrant doing so,' Pirro said on X. She also expressed confidence in the Inspector General’s ability to deliver a comprehensive report promptly.

Political Pressures and Fed Independence

The probe, launched in January, has been a focal point of ongoing tensions between the Fed and the Trump administration. Powell has faced persistent scrutiny, particularly regarding the Fed’s handling of construction funds. In response to the initial investigation, Powell asserted that 'no one—certain not the chair of the Federal Reserve—is above the law,' while criticizing the probe as politically motivated.

'This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,' Powell stated in January.

Kevin Warsh Moves Closer to Confirmation

The DOJ’s decision removes the primary obstacle to confirming Kevin Warsh as Powell’s successor. President Trump nominated Warsh, a former Wall Street executive with a net worth exceeding $100 million, in February. Sen. Thom Tillis (R-NC), who had vowed to block Warsh’s confirmation until the Powell probe was resolved, signaled openness to advancing the nomination following Friday’s announcement.

Warsh’s financial disclosures highlight his significant wealth, potentially making him the wealthiest Fed chair in history. The Senate Committee on Banking, Housing, and Urban Affairs has yet to vote on his nomination, though approval appears likely.

Powell’s term as chair ends May 15, though he may remain on the Federal Open Market Committee. The committee is expected to hold interest rates steady during its upcoming meeting.