The Department of Justice on Friday dropped its criminal investigation of Federal Reserve Chair Jerome Powell and the Fed's $2.5 billion building renovation project, a move that cleared a significant political obstacle ahead of Powell's term expiration in May. U.S. Attorney Jeanine Pirro announced the decision, saying her office referred the matter to the Fed's inspector general instead.
"The IG has the authority to hold the Federal Reserve accountable to American taxpayers. I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas," Pirro wrote on X on Friday morning. She added that she would "not hesitate to restart a criminal investigation should the facts warrant doing so."
President Donald Trump had repeatedly and publicly criticized Powell, threatening to fire him if he did not lower interest rates. The criminal inquiry into the renovation project had drawn skepticism from within Trump's own party. North Carolina Republican Sen. Thom Tillis had vowed to oppose any Trump nominee to replace Powell unless the administration dropped the investigation. The closure of the probe is seen as a victory for Tillis and signals that a confirmation process for new Fed leadership could proceed.
For Montanans, the Federal Reserve's interest rate decisions directly affect mortgage rates, farm operating loans, and small business borrowing costs. Who leads the Fed when Powell's term ends next month will have implications well beyond Washington.