U.S. Department of Justice Halts Investigation into Fed Chair Powell…Next Chair's Confirmation Expected to Accelerate (Comprehensive)

U.S. Department of Justice Halts Investigation into Fed Chair Powell…Next Chair's Confirmation Expected to Accelerate (Comprehensive)

Prosecutorial investigation targeting Powell over 'excessive spending on Fed building renovation' to be concluded

White House: "Next chair must be swiftly confirmed…Fact-finding under the jurisdiction of another agency"

The U.S. Department of Justice announced on the 24th (local time) that it would conclude its investigation into allegations of excessive spending on the renovation of the Federal Reserve (Fed) building, which had been targeting Fed Chair Jerome Powell.

Accordingly, the Senate confirmation process for the successor, Kevin Warsh, the nominee for the next chair, is expected to accelerate. Earlier, some lawmakers from the ruling Republican Party had publicly stated that they would not cooperate with the successor's confirmation unless the investigation into Chair Powell was stopped.

Janine Pirro, the U.S. Attorney for the District of Columbia, who is leading the investigation into Chair Powell, stated on X today that the Fed's Inspector General would investigate the issue of excess spending on the building renovation, adding, "I have directed that our investigation be concluded while this investigation proceeds."

She further stated that if the Inspector General's investigation confirms the allegations of excessive spending, "we will unhesitatingly resume a criminal investigation."

The Department of Justice had been investigating Chair Powell since last year in connection with allegations of excessive spending that arose during the renovation of the Fed building.

It has been interpreted that this investigation was aimed at pressuring Chair Powell, who did not comply with President Donald Trump's demands for interest rate cuts.

President Trump said in a media interview on the 21st, "We need to find out why a project that should have cost $25 million ended up costing billions."

With the Department of Justice officially halting the investigation into Chair Powell, the Senate confirmation process for Warsh, who was nominated as the next Fed chair in January, is expected to get the green light.

Some Republican members of the Senate Banking Committee, the relevant standing committee, had criticized the Justice Department's investigation into Chair Powell and maintained their opposition to Warsh's confirmation until the issue was resolved.

Consequently, Warsh's confirmation hearing was held on the 21st, but the timing of the confirmation vote remained uncertain.

As Chair Powell's term is scheduled to end on May 15, the White House and Republican leadership are expected to complete the confirmation process and push for Warsh's appointment before then. Meanwhile, Chair Powell's term as a board member, separate from his chairmanship, runs until January 2028.

The New York Times (NYT) reported that the Justice Department's end to the investigation "reflects the reality that President Trump, who has spent years trying to dismiss Chair Powell and force interest rate cuts, could not install his preferred candidate in that position while this investigation was ongoing."

White House spokesperson Caroline Leavitt told reporters today that U.S. Attorney Pirro's statement did not necessarily mean the end of the investigation, emphasizing that the investigation would continue through the Inspector General.

Leavitt said, "It is in the taxpayers' interest to get to the bottom of the truth," and "The investigation is still ongoing and merely proceeding under the jurisdiction of another agency."

She added, "The confirmation of candidate Warsh should proceed as quickly as possible," and "(some lawmakers) should not hold our nation's economy hostage due to disagreements with the Department of Justice."