The Justice Department has ended its criminal investigation into Federal Reserve Chair Jerome Powell, bringing a politically charged case to a close and shifting the remaining scrutiny over the Fed’s headquarters renovation project to the central bank’s inspector general. Reuters and The Associated Press reported Friday, April 24, 2026, that U.S. Attorney Jeanine Pirro said her office was dropping the probe and leaving further review of the renovation costs to the Fed’s internal watchdog.
The Jerome Powell investigation had become a major flashpoint because it centered not only on cost overruns at the Fed’s Washington buildings, but also on broader questions about the independence of the central bank. Its end also removes a key political obstacle to the confirmation of Kevin Warsh, President Donald Trump’s nominee to succeed Powell as Fed chair when Powell’s term as chair ends on May 15.
Why the DOJ Ended the Jerome Powell Investigation
Pirro said the Justice Department was closing the case because the Fed’s Office of Inspector General would scrutinize the renovation project instead. AP reported that she also said she would not hesitate to reopen a criminal investigation if future findings warranted it. Reuters likewise reported that she may resume the inquiry depending on what the inspector general turns up.
That means the legal threat hanging over Powell has been lifted, but the broader review of the renovation project is not over. Reuters reported that the Fed inspector general has already been examining the project since July 2025. The Fed’s own public FAQ on the renovation says Powell asked the inspector general last year to take a fresh look at the work.
The investigation focused on the rising cost of the Fed’s overhaul of its Washington headquarters and on Powell’s statements to Congress last year about the project. Reuters reported that the current budget stands at about $2.46 billion, while AP said earlier estimates had put the cost at $1.9 billion. The Fed has said the increase was driven largely by higher labor and material costs after the post-pandemic inflation surge.
A Judge Had Already Undercut the Case
Long before Friday’s announcement, the Powell case had already been badly weakened in court. Reuters reported that Chief U.S. District Judge James Boasberg blocked subpoenas to the Fed’s Board of Governors last month and found that prosecutors had shown essentially zero evidence that Powell committed a crime. Reuters also reported that the judge concluded the subpoenas were issued for an improper purpose, namely pressuring Powell to meet Trump’s demands for sharp rate cuts or to resign.
AP reported that a prosecutor handling the case had already conceded in a closed-door hearing in March that the government had not found evidence of a crime. Boasberg then quashed the subpoenas and described the government’s justification as thin and unsubstantiated, according to AP. Those rulings made it increasingly difficult for the Justice Department to keep the case moving in any credible way.
The legal collapse mattered because the investigation was never treated as routine. Reuters described it as one of the Justice Department’s pursuits of Trump critics and adversaries, while AP said the case was widely viewed as an attempt to pressure the Fed over interest rates. Powell himself said in January that the probe was really about monetary policy independence, not just renovations or congressional testimony.
Why the Decision Matters for the Fed and Warsh
The immediate political effect is on the succession fight at the Federal Reserve. Reuters and AP both reported that Sen. Thom Tillis had refused to back Kevin Warsh’s nomination while the Powell investigation remained unresolved. With the case now closed, that roadblock appears to have been removed.
That does not settle every question around Powell’s future. Reuters reported that Powell said last month he had no intention of leaving the Fed’s Board of Governors until the investigation was well and truly over, with transparency and finality. AP similarly reported that Powell had said he would not leave while the probe was still hanging over him, but did not promise that he would automatically step down once it ended. Powell’s term as chair expires next month, but his separate term as a governor runs until January 2028.
That distinction matters because if Powell stays on the Board after his chairmanship ends, Trump would lose the chance to fill another seat on the seven-member body. AP noted that this is one reason the Powell matter has carried institutional significance well beyond a renovation dispute. The case has been tied directly to the balance of power over monetary policy at a time when Trump has repeatedly pushed for lower interest rates.
The Scrutiny Is Not Fully Over
Even with the criminal case closed, the story is not finished. The Office of Inspector General is still reviewing the renovation project, including the cost increases. Reuters reported that the inspector general’s office said it was actively working to complete its review and intended to make the results available to the public and Congress. The OIG work plan published in July 2025 also shows that the review was launched to assess oversight of the Eccles Building and 1951 Constitution Avenue renovation project, including the factors behind rising costs.
So the real change on Friday was legal and political, not factual. The Justice Department has stepped back, but the inspector general’s review continues. That leaves Powell free of an active criminal probe while preserving a formal review of the renovation itself. For markets, lawmakers and the White House, that is a meaningful distinction. The threat of indictment is gone for now, but the questions about how the project became so expensive are still headed for a public accounting.
