THE Ministry of Justice abandoned its criminal investigation into Federal Reserve Chair Jerome Powellremoving a major obstacle to the president’s confirmation by the Senate Donald Trumpthe appointment of Kevin Warsh to replace it.
American lawyer Jeanine Pirrothe top federal prosecutor in the District of Columbia, said in a post on that she abandons the investigation. His announcement comes three days after Warsh testified before the Senate Banking Committee regarding his nomination.
Pirro said last Wednesday that she was determined to continue the criminal investigation, which had been paralyzed by a decision of the federal judge cancelation assignment his office issued to the Fed.
Senator Thom Tillisa Republican from North Carolina and Banking Committee The congressman effectively blocked the full Senate from voting to confirm Warsh as Fed chair unless the criminal investigation was completed.
Pirro, in announcing she was dropping the investigation, said that instead of her office continuing the probe, the Federal Reserve’s inspector general “was asked this morning” to investigate cost overruns in the investigation. multibillion-dollar renovation of the central bank’s headquarters in Washington.
She claimed the renovation — which the Fed’s inspector general has been investigating since last summer — and Powell’s testimony about the project before the banking committee was why she was investigating the Fed chief.
Federal Reserve Chairman Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee at the Federal Reserve October 29, 2025 in Washington, DC.
Alex Wong | Getty Images
Powell and others had said the real reason for Pirro’s investigation was to pressure him and the Fed to lower interest rates as Trump wanted.
Powell asked inspector general in July to revisit the renovation project after Trump criticized its cost.
He noted at the time that the inspector general conducted an audit in 2021 to evaluate the Fed Board’s “process of planning and managing several renovation projects as well as the purchasing of services under various renovation-related contracts.”
A spokesperson for the inspector general, in a statement to CNBC Friday, said the inspector general is “actively working to complete” an “assessment of the Council’s building renovation project” and would make the results of that investigation available to the public and Congress when it is completed.
Pirro’s warning Pirro in his X post said: “The IG has the authority to hold the Federal Reserve accountable to American taxpayers. »
“I expect a full report as soon as possible and am confident that its outcome will help resolve, once and for all, the issues that led this office to issue subpoenas,” she said.
“Accordingly, I have directed my office to close our investigation while the IG undertakes this investigation,” Pirro said.
“Please note, however, that I will not hesitate to relaunch a criminal investigation if the facts warrant it.”
Federal Reserve Chairman nominee Kevin Warsh arrives for his Senate Banking, Housing and Urban Affairs Committee confirmation hearing in the Dirksen Building, April 21, 2026.
Tom Williams | Cq-roll Call, Inc. | Getty Images
Kush Desai, White House spokespersonin a statement, said: “American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the most powerful authorities in the Office of Inspector General are best positioned to get to the bottom of it.” »
“The White House remains as confident as before that the Senate will quickly confirm Kevin Warsh as the next Federal Reserve chairman in order to finally restore competence and confidence in the Fed’s decision-making process,” Desai said.
The Federal Reserve declined to comment.
CNBC requested comment from Pirro’s office, Warsh and Tillis, as well as Senate Banking Committee Chairman Tim Scott, R-S.C., and other members of that committee.
Earlier this week, Scott advocated ending the criminal investigation and turning the matter over to Congress.
In an interview with CNBC, Scott said shifting responsibility for the investigation from Pirro’s office was essential for Warsh to be confirmed as president, adding that any findings regarding the renovation could be made public once the review is complete.
Scott suggested the Banking Committee could work with the House Financial Services Committee to “establish a committee that would have ongoing oversight of construction projects within the Banking Committee’s jurisdiction.”
“Wherever it leads us, we should go there. If it leads to a criminal prosecution, so be it,” Scott said. “But give us Kevin Warsh at the Fed so we have access to all the information we need.”
Scott also said he thought Powell “was incompetent, not criminal.”
Warren pushes backSenator Elizabeth Warren of Massachusetts, the top Democrat on the Banking Committee, said dropping the Powell investigation “is just an attempt to clear the way for Senate Republicans to install President Trump’s puppet Kevin Warsh as Fed chairman.”
“Let’s be clear about what the Justice Department announced today: It threatened to restart the bogus criminal investigation into Fed Chairman Powell at any time, while failing to abandon its ridiculous criminal investigation against Governor Lisa Cook,”Warren said.
Last summer, Trump sought to fire Cook, who like Powell had resisted his demands to cut interest rates, after an official in his administration claimed she made false statements on mortgage applications.
Cook denied the allegations and filed a lawsuit seeking to block his firing. She remained a member of the Fed’s Board of Governors while the Supreme Court considered her case.
“Anyone who believes that Donald Trump’s corrupt plan to take over the Fed is over is mistaken,” Warren said. “The Senate should not proceed with the nomination of Kevin Warsh.”
—CNBC Jeff Cox, Kevin Breuninger, Matt PetersonBetsy Spring and Emily Wilkins contributed to this article.
