The U.S. Justice Department has ended its criminal investigation into Jerome Powell, removing a major obstacle to Senate consideration of Kevin Warsh as the next leader of the Federal Reserve.
The probe had focused on renovations at the Federal Reserve’s headquarters. U.S. Attorney Jeanine Pirro announced the case would be closed, with further review instead handled by the Fed’s inspector general.
Warsh, nominated in January by Donald Trump to replace Powell, had faced delays because Sen. Thom Tillis of North Carolina said he would oppose confirmation until the investigation was resolved. Powell’s term as chair is set to expire May 15.
According to the report, the investigation struggled to produce evidence of criminal wrongdoing. During a closed court hearing in March, a prosecutor acknowledged the government had not found evidence of a crime. A federal judge later blocked subpoenas issued to the Fed, saying prosecutors had shown little basis for the action.
The case became one of the most closely watched disputes between the White House and the central bank. Trump has repeatedly criticized Powell for refusing to sharply lower interest rates. The Fed has instead kept rates steady while monitoring inflation pressures, including rising gas prices linked to the conflict involving Iran.
Warsh told senators this week he had made no promises to the administration regarding future rate cuts and would act independently if confirmed. Democrats questioned his independence, some of his financial disclosures, and his positions on interest rates.
The decision to drop the case marks an unusual retreat for a Justice Department that had pursued several investigations involving figures viewed as opponents of the president, many of which have not succeeded.
Another unresolved issue is whether Powell will remain on the Fed’s Board of Governors after his chairmanship ends. His separate term as a governor runs until January 2028. If he stays, Trump would be unable to immediately fill another seat on the seven-member board.
Source: Phla Inquirer