Federal prosecutors are concluding their criminal investigation into Federal Reserve Chairman Jerome Powell, opening the way for the confirmation of Kevin Warsh as the next head of the central bank’s Board of Governors.

Investigation Closed, Focus Shifts

U.S. Attorney Jeanine Pirro announced the conclusion of the criminal investigation into Chairman Powell. This removes a major obstacle to the confirmation of Kevin Warsh, President Trump’s nominee for the position of head of the Federal Reserve’s Board of Governors.

The focus of scrutiny is now turning to potential cost overruns related to the renovation of the Federal Reserve’s headquarters in Washington, D.C. The investigation into these overruns will be led by the Fed’s Inspector General.

Inspector General to Lead Review

Pirro stated that her office is redirecting its resources to allow the Inspector General to conduct a thorough inquiry. She also reserved the right to reinstate the criminal investigation if new evidence emerges. A detailed report from the Inspector General’s office is anticipated.

The Federal Reserve’s Office of the Inspector General has been evaluating the renovation project since July, independently analyzing the significant cost increases and overruns. The office is committed to publicly releasing its findings to both the public and Congress.

Warsh Confirmation and Senate Concerns

This shift in investigative focus follows a period of uncertainty surrounding Warsh’s confirmation. Senator Thom Tillis had previously indicated he would withhold his vote until the investigation into Powell was resolved.

During his recent testimony before the Senate Banking Committee, Warsh affirmed the central bank’s commitment to maintaining its independence in monetary policy decisions.

Horowitz Oversees Review, White House Response

Michael Horowitz, the Inspector General overseeing the review, previously investigated the origins of the FBI’s 2016 election probe at the Justice Department. The Justice Department’s decision to drop the Powell probe was first reported by ABC News.

The Federal Reserve declined to issue a statement. However, the White House expressed confidence in Warsh’s eventual confirmation, emphasizing the importance of accountability in the Federal Reserve’s financial management.

A White House spokesperson stated that American taxpayers deserve answers and that the Inspector General’s office is best equipped to uncover the truth.

Background of the Investigation

This announcement follows a recent attempt by prosecutors from Pirro’s office to access the ongoing renovations at the Fed’s headquarters, which was denied. The initial investigation into Powell surfaced in January when the chairman disclosed receiving grand-jury subpoenas related to his June 2025 testimony concerning the long-term renovation project.

A District Court judge later quashed those subpoenas, deeming them a tactic to pressure Powell regarding interest rate decisions or his potential resignation. Despite Pirro’s earlier statements, the Justice Department did not appeal the judge’s ruling.

The investigation was reportedly fueled by President Trump’s repeated criticisms of Powell’s monetary policy and his focus on the renovation project.