The US Department of Justice has dropped its investigation into Federal Reserve Chair Jerome Powell over alleged cost overruns linked to renovation works at the central bank’s buildings.
US Attorney Jeanine Pirro announced that the matter would instead be handled through an internal investigation led by the Federal Reserve’s inspector general.
The probe stemmed from criticism by President Donald Trump, who last year accused the Fed of overspending on building renovations amid his long-running tensions with Powell.
The development comes as Powell’s term nears its end and the US Senate considers Trump’s nominee to replace him, former Federal Reserve governor Kevin Warsh. Republican Senator Thom Tillis had reportedly withheld support for Warsh’s nomination unless the administration ended its investigation into Powell.
Reacting to the decision, White House spokesperson Kush Desai said American taxpayers deserved transparency regarding the Federal Reserve’s spending.
“The Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter,” Desai said in a statement.
He added that the White House remained confident the Senate would move quickly to confirm Kevin Warsh as the next Federal Reserve chair.
Trump has repeatedly criticised Powell over interest rate policy since returning to office last year, urging the Fed to cut rates and at times suggesting he should be removed from the role — a move some legal experts argued could violate federal law.
In January, Powell disclosed in a rare public video statement that the Justice Department had issued subpoenas to the Federal Reserve and threatened possible criminal charges related to testimony he gave before a Senate committee on the renovation projects.