DOJ Terminates Criminal Investigation into Fed Chair Jerome Powell

The U.S. Department of Justice announced Friday the closure of its criminal investigation into Federal Reserve Chair Jerome Powell, ending a period of legal uncertainty surrounding the central bank's leadership. The decision was announced via a post on X by Jeanine Pirro, the top federal prosecutor in the District of Columbia. The probe focused on alleged cost overruns associated with a multi-billion-dollar renovation of the Federal Reserve's Washington headquarters. The investigation had previously been hampered by a federal court ruling that quashed subpoenas issued to the Federal Reserve, which Pirro had previously stated had crippled the office's efforts. This legal resolution removes a significant political obstacle in the U.S. Senate. Senator Thom Tillis of North Carolina had placed an effective hold on the confirmation process for Kevin Warsh, President Donald Trump's nominee to replace Powell, contingent upon the termination of the criminal inquiry. Pirro stated that the matter has now been referred to the Federal Reserve's inspector general, an internal watchdog tasked with holding the institution accountable to taxpayers. While the criminal case is closed, Pirro noted that the DOJ reserves the right to restart a criminal investigation should new facts warrant such action. From a market perspective, the move provides stability to the transition of the Federal Reserve's leadership. By removing the legal cloud over the current Chair and facilitating the appointment of a successor, the resolution reduces the risk of a prolonged leadership vacuum or institutional turmoil at the helm of the U.S. monetary authority.