The Justice Department has concluded its inquiry into excessive expenses related to the remodeling work at the Federal Reserve during Jerome Powell’s tenure as chairman, as confirmed by U.S. Attorney Jeanine Pirro on Friday. Pirro announced that the Federal Reserve’s Inspector General has been tasked with examining the construction costs to ensure accountability to American taxpayers. She emphasized the Inspector General’s authority in overseeing the Federal Reserve’s financial responsibilities.
Pirro also stated that a detailed report is expected promptly, aiming to address the concerns that led to the issuance of subpoenas. However, she made it clear that if necessary, she would not hesitate to resume a criminal investigation based on the facts. A federal judge recently blocked subpoenas issued to the Fed’s board of governors, ruling that they were improperly issued to pressure Powell to comply with President Donald Trump’s requests to swiftly reduce interest rates or step down. Despite this setback, Pirro had expressed intent to challenge the ruling and continue the investigation.
Jerome Powell’s term as chair is due to end on May 15. The investigation led by Pirro had influenced Powell’s decision to maintain his position as a Fed governor until 2028, aligning with the end of Trump’s presidency. Typically, Federal Reserve chiefs step down from the board at the conclusion of their leadership terms.
The Trump administration’s actions, including the criminal investigation, had the potential to delay the Senate confirmation of Kevin Warsh, Trump’s nominee to replace Powell. Senator Thom Tillis from North Carolina, a Republican member of the Senate banking committee, viewed the probe as an unwarranted attack on the Fed’s independence and vowed to block Warsh’s confirmation until the matter is resolved.
In response to the announcement, Democratic Senator Elizabeth Warren criticized the investigation into renovation costs as a tactic to undermine the Federal Reserve’s autonomy from the White House. The probe, which Trump inaccurately cited cost figures for, received backlash from Democrats and former Fed leaders for potentially politicizing the institution. Three of the current Fed governors were appointed by President Joe Biden, including Lisa Cook, whose dismissal the Trump administration has sought.
Kevin Warsh, a former Fed governor, stressed the importance of monetary policy independence in his statements to senators. He clarified that he had made no commitments to Trump regarding interest rate adjustments. Warsh blamed the Federal Reserve under Powell for the post-COVID-19 inflation surge, which he claimed was impacting American households negatively.
The development surrounding the investigation into Jerome Powell’s actions at the Federal Reserve continues to draw scrutiny from various political figures and financial experts.
