The US Department of Justice (DOJ) has closed its criminal investigation into Federal Reserve Chair Jerome Powell, according to a statement from US Attorney for the District of Columbia, Jeanine Pirro [1]. The probe, which centered on alleged cost overruns in the Federal Reserve's headquarters project, will now be referred to the Fed’s internal watchdog, the inspector general, for further review [1]. Pirro announced on X that she expects a comprehensive report from the inspector general soon, expressing confidence that the findings will help resolve the questions that prompted the subpoenas in the first place [1].
ABC News initially reported that senior DOJ officials had informed senators, including Republican Senator Thom Tillis of the Senate Banking Committee, about the decision to drop the probe and refer the matter to the Fed’s internal oversight [1]. Senator Tillis had previously stated he would not support the confirmation of Kevin Warsh as the next Fed Chair unless the DOJ investigation into Powell was dropped [1]. The US Senate is responsible for confirming the next Fed Chair, whose term is set to begin in June 2026 [1].
The closure of the investigation removes a significant obstacle to the potential confirmation of Kevin Warsh as the next head of the US central bank, as highlighted by Pirro’s remarks and Senator Tillis’s prior position [1]. The market implications of this development were not explicitly discussed in the article, nor were there any analyst opinions or forward-looking statements regarding the impact on monetary policy or financial markets [1].
CONCLUSION
The DOJ's decision to close its investigation into Fed Chair Powell eliminates a key hurdle for the potential confirmation of Kevin Warsh as the next Federal Reserve Chair. While the matter of cost overruns will continue to be reviewed by the Fed’s inspector general, the Senate confirmation process may now proceed with fewer obstacles.