Powell Case Dropped, Path Clears for Warsh to Chair the Fed

KOMPAS.com – The US Department of Justice has halted the criminal investigation into Federal Reserve Chair Jerome Powell. This decision simultaneously removes a major barrier for the Senate to approve the nomination of Kevin Warsh as Powell’s replacement. Quoted from CNBC on Saturday (25/4/2026), the decision was announced by US Attorney for the District of Columbia Jeanine Pirro via a statement on social media platform X. This announcement came three days after Warsh testified at the Senate Banking Committee’s confirmation hearing. Previously, Pirro had indicated she would continue the investigation. However, those efforts weakened after a federal judge quashed several subpoenas issued by her office to the US central bank, the Federal Reserve. Pirro stated that instead of pursuing the criminal probe, oversight would be redirected to the Federal Reserve’s inspector general. That internal body has been tasked with investigating the ballooning costs of the central bank’s headquarters renovation project in Washington DC, valued at billions of US dollars. According to Pirro, the renovation project and Powell’s testimony before the Senate Banking Committee formed the initial basis for the investigation. However, an audit of the project has actually been underway since last summer. Powell and several parties previously viewed the investigation as politically charged. They suspected the move aimed to pressure the central bank into lowering interest rates, in line with Trump’s wishes. Last July, Powell himself requested the inspector general to review the renovation project after receiving criticism from Trump regarding its costs. He also noted that a similar audit was conducted in 2021 to assess the planning and management processes of the renovation project. Nevertheless, Pirro left open the possibility of reopening the criminal investigation if new facts emerge to support it. Meanwhile, the White House, through spokesperson Kush Desai, stated that the public deserves clarity on allegations of fiscal mismanagement within the Federal Reserve. He also expressed confidence that the Senate will soon confirm Warsh as the next Fed Chair.