DOJ drops probe of Jerome Powell, clearing way for Warsh confirmation

The U.S. Department of Justice (DOJ) announced on April 24, 2026 that it is closing the criminal investigation into Federal Reserve Chair Jerome Powell; responsibility for further review of renovation costs at Fed facilities will be handled by the Fed’s inspector general.

The inquiry centered on cost overruns tied to a multi-billion-dollar renovation of Federal Reserve buildings in the Washington area, estimated by the Fed at roughly $2.5 billion, and on Powell’s testimony to Congress. U.S. Attorney for the District of Columbia Jeanine Pirro said on social media that her office would end the probe as the inspector general takes up scrutiny of the project; recent court rulings had already limited some of the subpoenas prosecutors sought.

Markets reacted to the announcement with a fall in the dollar and a pullback in Treasury yields, reflecting an easing of near-term political risk around Fed leadership and a recalibration of rate-cut expectations tied to a potential Warsh chairmanship. U.S. equity indexes showed selective gains as investors priced reduced uncertainty about the succession process.

The decision underlines the intersection of politics and central-bank governance. The probe had become emblematic of broader tensions between the White House and the Fed, and a federal judge had earlier described prosecutors’ case as thin; critics viewed the investigation as an attempt to pressure monetary policy decisions. Transferring the matter to the inspector general narrows the criminal-justice dimension but leaves oversight and accountability questions in play.

Analysts say closing the DOJ inquiry likely removes a key procedural obstacle to Kevin Warsh’s confirmation but does not eliminate substantive Senate scrutiny over his independence and policy preferences. If Warsh is confirmed and signals a stronger bias toward earlier or deeper interest-rate cuts, markets could quickly reprice inflation and yield expectations; conversely, a pledge to maintain independence would stabilize the current path. For now, the move reduces one source of uncertainty while leaving monetary policy debates intact.