DOJ to appeal after judge blocks Fed subpoenas in Powell probe

A federal judge on March 13, 2026 quashed Department of Justice subpoenas seeking records from the Federal Reserve in a criminal inquiry related to Chair Jerome Powell, and the DOJ said it will appeal the ruling. Judge James Boasberg wrote that the government offered “no evidence whatsoever” that Powell committed a crime and suggested the subpoenas were intended to harass or pressure the Fed.

The probe arose from Powell’s testimony last year before the Senate Banking Committee about an extensive renovation of Fed buildings. The Federal Reserve’s most recent estimate places the project cost at roughly $2.5 billion, about $600 million higher than a 2022 estimate of $1.9 billion — a focal point for prosecutors questioning potential false statements. U.S. Attorney Jeanine Pirro, who issued the subpoenas, criticized the court’s decision and announced plans to appeal.

The legal setback for DOJ and the announced appeal have immediate institutional implications. The judge’s finding that the subpoenas’ dominant purpose may have been to pressure Powell raises concerns about executive branch interference in monetary policy decisions. Meanwhile, Powell’s term expires on May 15, 2026; the confirmation of President Trump’s nominee to succeed him, Kevin Warsh, has already been complicated by the investigation and could be delayed further.

In a broader context, the dispute highlights a rare collision between criminal process and central bank independence. Observers note the ruling and any subsequent appellate proceedings will be watched closely by markets and policymakers as signals about institutional norms and the limits of investigatory tools when applied to central bank officials. The case also underscores how governance disputes can reverberate through financial and political channels.

Market analysts say the DOJ appeal is likely to prolong uncertainty, which could feed near-term volatility in risk assets and interest-rate-sensitive sectors until the legal path clears. Political factors — including senators who have signaled they will block confirmation votes until the investigation concludes — make the timing of any leadership change at the Fed uncertain. Ultimately, the outcome of the appeal and any higher court rulings will shape both institutional precedent and market expectations for U.S. monetary policy.