A ffederal judge in scathing decision blocked subpoenas issued by a grand jury to Federal Reserve as part of a criminal investigation against the president Jerome Powellsaying there was “a mountain of evidence” that they were published to pressure the Fed board to lower interest rates, like the president Donald Trump has been asking for a long time.
United States Attorney for the District of Columbia Jeanine Pirro immediately said the Justice Department would appeal what it called a “scandalous” decision after it was made public Friday.
Friday’s action will likely keep Powell in the presidency longer because Sen. Thomas TillisRN.C., is committed to blocking Kevin WarshConfirmation of to succeed Powell until the end of the federal investigation.
That could mean interest rates will stick around longer than Trump wants, as Powell has refused to comply with the president’s demands to lower them further.
U.S. District Judge James Boasberg, in his ruling, said the evidence showed Pirro was motivated to investigate Powell because of a desire to get the Fed chief to pander to Trump and cut interest rates quickly and broadly.
Pirro’s investigation will reportedly focus on the multibillion-dollar renovation of the Fed’s headquarters in Washington and Powell’s testimony before the Senate Banking Committee about that project.
“Did the prosecutors issue these subpoenas for a legitimate purpose? The Court concludes that they did not,” Boasberg wrote in the decision from the U.S. District Court in Washington, dated Wednesday, but unsealed Friday.
Boasberg wrote: “A mountain of evidence suggests that the government served these subpoenas on [Fed’s] Board of directors to pressure its chairman to vote to lower interest rates or resign.
“On the other side of the scale, the Government has produced virtually no evidence to suspect Chairman Powell of a crime; indeed, his justifications are so flimsy and baseless that the Court can only conclude that they are pretexts,” the judge wrote.
“The Court therefore finds that the subpoenas were issued for an improper purpose and will quash them.”
Pirro blasted Boasberg’s decision during a news conference Friday, calling it “outrageous.”
“Jerome Powell is now bathed in immunity,” she fumed. “This is false, and this without legal authorization.”
Tillis, in an article on On Friday, he predicted the decision would stand.
“This decision confirms how weak and frivolous the criminal investigation against Chairman Powell is and is nothing more than a failed attack on the independence of the Fed,” he said.
“We all know how this is going to end and the DCUS Attorney’s Office should save itself any further embarrassment.”
The Federal Reserve declined to comment when contacted by CNBC.
Read more about CNBC’s politics coverageBoasberg’s decision and the DOJ’s planned appeal will likely keep Powell in his seat as Fed chair until his term expires in May.
Tillis’ promised “no” vote in the Banking Committee, advancing Warsh’s nomination, would stall that committee, preventing Warsh from getting a confirmation vote by the full Senate.
Trump’s desire for the Fed to further cut interest rates was further complicated by the war in Iran.
Soaring energy costs will likely deter policymakers from relaxing policies until it becomes clearer when and how the war will end.
Federal Reserve Chairman Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee at the Federal Reserve in Washington, October 29, 2025.
Alex Wong | Getty Images News | Getty Images
Recent statements from Fed officials have indicated a rather cautious approach to further cuts, with the exception of governors. Stephen Miran And Christopher Wallerwho favored lower rates.
The markets had already postponed any hope of a rate cut until the end of the year. Before the war, the market had predicted at least two reductions.
—CNBC Eamon Javers And Jeff Cox contributed to this article