DOJ Drops Criminal Probe of Fed Chair Powell, but His Successor’s Confirmation Remains Uncertain

Justice Department Drops Criminal Probe of Fed Chair Jerome Powell The Justice Department has ended its criminal investigation into Federal Reserve Chair Jerome Powell, removing a significant obstacle to the potential confirmation of Kevin Warsh as Powell’s successor. The decision, announced on April 24, 2026, concludes a probe that had drawn criticism for threatening the independence of the U.S. Central bank. The investigation centered on allegations related to cost overruns in a multi-billion-dollar renovation project at the Federal Reserve’s Washington headquarters. U.S. Attorney for the District of Columbia Jeanine Pirro stated that the probe would be closed, with the Federal Reserve’s Inspector General now tasked with reviewing the building costs instead. Pirro emphasized that while the criminal investigation is ending, her office remains prepared to reopen it if warranted by latest facts. Prior to the investigation’s conclusion, Powell had sought additional oversight, requesting in a July 2025 letter to the Office of Management and Budget that the Inspector General conduct another review of the renovation project. Former Federal Reserve chairs Janet Yellen, Ben Bernanke, and Alan Greenspan had previously denounced the probe as an unprecedented effort to undermine central bank independence through prosecutorial action. The termination of the investigation clears a major hurdle for Kevin Warsh, whose nomination to become the next Federal Reserve chair had been stalled pending the outcome of the DOJ review. Warsh was sworn in during his nomination hearing before the Senate Banking Committee on April 21, 2026, though a final confirmation vote remains pending. While the criminal probe has ended, questions about the Federal Reserve’s autonomy and the appropriate boundaries of executive oversight continue to resonate in policy discussions. The episode underscores the sensitivity surrounding investigations into independent federal agencies and the potential implications for market confidence and institutional credibility.