U.S. Attorney Jeanine Pirro has closed the criminal investigation into Federal Reserve Chair Jerome Powell. The probe focused on cost overruns related to the renovation of the central bank’s headquarters in Washington, D.C.
Shift to Internal Oversight
The Department of Justice investigation is being replaced by a review conducted by the Federal Reserve’s Office of the Inspector General. Pirro stated that the Inspector General has the authority to hold the institution accountable to American taxpayers.
Pirro expects a comprehensive report from the internal watchdog in the near future. She noted that her office may restart the criminal investigation if the findings of the report justify doing so.
Clearing the Path for Kevin Warsh
This legal development removes a significant obstacle to the confirmation of Kevin Warsh, President Donald Trump’s nominee to succeed Powell. The move is expected to facilitate Warsh’s appointment as the head of the central bank.
Republican Senator Thom Tillis had previously used the ongoing criminal probe as a reason to block Warsh’s candidacy. Tillis indicated during a Senate Banking Committee hearing that he would support the confirmation once the investigation ended.
Trump and the Federal Reserve
The relationship between President Trump and Jerome Powell has been characterized by frequent clashes over interest rate directions. Trump has consistently pressured the Fed to lower rates to increase his influence over the institution.
Powell has previously described these actions as “constant pressure and threats” from the Trump administration. Last week, the President threatened to fire Powell from the Board of Governors if he did not leave his post by the complete of his term.
This is not the first attempt by the administration to shift the bank’s leadership. President Trump previously attempted, though unsuccessfully, to remove Governor Lisa Cook from her position.
What Happens Next
The Senate Banking Committee, composed of 13 Republicans and 11 Democrats, may now move forward with the vote on Kevin Warsh. With the primary objection from Senator Tillis resolved, the nomination is likely to progress.
Meanwhile, the Inspector General will continue its analysis of the multi-billion-dollar renovation project. The resulting report could potentially lead to further legal actions or resolve the questions that prompted the initial subpoenas.
Frequently Asked Questions
Why was the criminal investigation into Jerome Powell dropped?
U.S. Attorney Jeanine Pirro closed the probe to allow the Federal Reserve’s Inspector General to examine the cost overruns of the headquarters renovation and to remove a hurdle for the confirmation of Kevin Warsh.
Who is Kevin Warsh?
Kevin Warsh is President Donald Trump’s nominee to succeed Jerome Powell as the head of the Federal Reserve’s Board of Governors.
What was the primary cause of tension between President Trump and Jerome Powell?
The tension centered on disagreements over the direction of interest rates, with President Trump insisting that the Fed lower them.
Do you believe the Federal Reserve should remain strictly independent from presidential influence?
