The felony investigation that has held the Federal Reserve chair nomination hostage for 3 months is over—kind of.
U.S. Legal professional for the District of Columbia Jeanine Pirro introduced Friday that her workplace is closing its probe into Fed Chair Jerome Powell and the central financial institution’s Washington headquarters renovation, punting the matter to the central financial institution’s inspector basic.
“This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns – in the billions of dollars – that have been borne by taxpayers,” Pirro wrote on X. “The IG has the authority to hold the Federal Reserve accountable to American taxpayers.”
The choice might clear a significant procedural hurdle for Kevin Warsh, President Donald Trump’s decide to interchange Powell when his time period as chair expires Might 15.
Sen. Thom Tillis, the North Carolina Republican who sits on the Senate Banking Committee, has vowed to dam Warsh’s affirmation so long as the DOJ probe remained open, calling the investigation “weak” and “frivolous” and framing it as an assault on Fed independence. Republicans maintain a 12-10 edge on the committee, which implies Tillis’s single vote is sufficient to create an 11-11 impasse and maintain the nomination frozen.
Neither Tillis nor the Federal Reserve Board of Governors instantly responded to Fortune’s request for remark.
Pirro’s reversal is a shock, and a pointy pivot. As just lately as Wednesday, she instructed reporters she would “not back off,” and was getting ready to attraction a ruling that quashed two of her subpoenas to the Fed.
The probe centered on value overruns for the renovation of two historic Fed buildings, which ballooned from $1.9 billion in 2023 to $2.5 billion in 2025. Powell, for his half, has mentioned the investigation is a strain tactic designed to power the Fed to chop rates of interest sooner than it believes is warranted.
Whether or not Pirro’s announcement resolves the underlying standoff is a unique query. It might give Tillis sufficient to launch his maintain and transfer Warsh out of committee. But it surely doesn’t clearly ship what Trump’s different precedence: Powell’s early exit from the Fed Board of Governors, a seat he’s entitled to carry till 2028.
Powell has mentioned that he received’t go away till the probe is “well and truly over,” a door which Pirro left conspicuously open.
“Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so,” she wrote.
