US Justice Dept drops investigation into Fed Chair Powell

The US Justice Department is closing its investigation into Federal Reserve Chair Jerome Powell, Attorney Jeanine Pirro said on Friday, removing an obstacle to the confirmation of Kevin Warsh, President Donald Trump’s pick to lead the central bank. The move by Pirro, a Trump ally and the top federal prosecutor in Washington, D.C., for now ends an inquiry that had been rebuked by a federal judge and prompted a key Republican senator to block Trump’s nominees to the central bank.
Pirro said she had instead asked the Fed’s internal watchdog, the Office of Inspector General, to examine cost overruns in renovations of the central bank’s Washington headquarters. The inspector general has already been examining the project after Powell requested a review last year. “The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said in a social media post. “I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.”
The Powell probe, which had been examining the renovation and Powell’s statements to Congress last year about the project, became the latest flashpoint in the Justice Department’s pursuit of adversaries and critics of Trump. A federal judge last month blocked subpoenas to the Fed’s Board of Governors, finding they were issued for the improper purpose of pressuring Powell to cave to Trump’s demands to rapidly lower interest rates or resign. Chief U.S. District Judge James Boasberg found prosecutors had shown “essentially zero evidence” Powell committed a crime.
The decision to end the probe may clear the way for Warsh’s Senate confirmation as Fed chair, potentially by May 15 when Powell’s leadership term ends. It’s less clear if the move meets Powell’s own bar for stepping down as governor.