US justice department drops probe into Fed chairman Jerome Powell

April 24, 2026

The US Justice Department has ended its criminal investigation into Federal Reserve Chairman Jerome Powell concerning alleged excessive costs for Fed building renovations, shifting the matter to an internal review by the central bank's inspector general. This investigation emerged from President Trump's long-running conflict with Powell over interest rate policy, with Trump criticizing renovation costs that reached $3. 1 billion compared to the Fed's $2.

Who is affected

Jerome Powell, Federal Reserve Chairman
Kevin Warsh, Trump's nominee for Fed chair
President Donald Trump
Senator Thom Tillis (Republican who withheld support for Warsh)
US taxpayers
The Federal Reserve as an institution
US Attorney Jeanine Pirro
The Fed's Office of the Inspector General

What action is being taken

The Justice Department is dropping its criminal investigation into Powell
An internal investigation led by the Fed's inspector general is being conducted
The US Senate is considering Kevin Warsh's nomination as Fed chair
The inspector general's office is actively working to complete its review

Why it matters

This situation matters because it represents a direct threat to the independence of the Federal Reserve, a cornerstone institution that sets monetary policy based on economic conditions rather than political influence. The investigation appeared to be retaliation for Powell's refusal to lower interest rates despite presidential pressure, establishing a dangerous precedent where criminal investigations could be weaponized against central bank officials who make policy decisions that conflict with presidential preferences. The Fed's ability to maintain credibility and manage inflation through interest rate decisions depends on its freedom from political interference.

What's next

The inspector general will complete its review and make results public to Congress
The Senate will vote on Kevin Warsh's confirmation as the next Fed chair
Powell will remain in his position until May 15 when his term expires, and plans to stay until Warsh is confirmed
US Attorney Jeanine Pirro stated she would not hesitate to restart a criminal investigation if facts warrant doing so

Read full article from source: BBC