U.S. Senator Thom Tillis, R-N.C., in an elevator at the U.S. Capitol on June 30, 2025 in Washington, DC Tillis had vowed to oppose President Donald Trump’s choice to succeed Fed Chair Jerome Powell unless the administration drops its Fed investigation. (Photo by Alex Wong/Getty Images)
WASHINGTON — The Justice Department on Friday dropped its investigation into the Federal Reserve and Chairman Jerome Powell over the cost of building renovations, a move that could open the door for novel leadership at the Fed next month — and signaled a victory for North Carolina Sen. Thom Tillis.
U.S. Attorney Jeanine Pirro said her office dropped the investigation after she asked the Fed’s inspector general to look into the cost overruns.
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers. I expect a comprehensive report shortly and am confident that the outcome will help resolve once and for all the issues that led this office to issue subpoenas,” Pirro said wrote on X just after 10 a.m. Eastern time.
Pirro said she “will not hesitate to initiate a criminal investigation if the facts warrant it.”
Powell, whose term ends in May, has been repeatedly publicly criticized by President Donald Trump, who threatened to fire the central bank chairman if he did not cut interest rates.
The Trump administration’s criminal investigation into Powell over a $2.5 billion renovation project at the Fed’s offices was viewed with suspicion, including by his own party.
Tillis, R.N.C., said He would not vote for Trump’s choice to replace Powell, former Fed Governor Kevin Warsh, unless the administration dropped its “bogus” investigation.
A positive vote from Tillis on the closely divided Senate Banking, Housing and Urban Affairs Committee is necessary to advance Warsh’s nomination, since all Democrats on the panel oppose him.
Tillis’ office did not immediately respond for comment.
A federal judge last month blocked the government subpoenas investigating the Fed and Powell.
The Justice Department declined to comment and referred States Newsroom to Pirro’s social media post.
A White House official confirmed Pirro’s announcement on Friday.
“American taxpayers deserve answers to the Federal Reserve’s fiscal mismanagement, and the more powerful agencies of the Office of Inspector General are best positioned to get to the bottom of the matter. The White House remains confident that the Senate will quickly confirm Kevin Warsh as the next Chair of the Federal Reserve, finally restoring competence and confidence in the Fed’s decision-making,” White House spokesman Kush Desai said in a statement to States Newsroom.
Sen. Elizabeth Warren, D-Mass., issued a statement dismissing the Justice Department’s announcement as “an attempt to clear the way for Senate Republicans to install President Trump’s sock puppet Kevin Warsh as Fed chair.”
“Let’s be clear about what the Justice Department announced today: They have threatened to reopen the bogus criminal investigation into Fed Chairman Powell at any time, while they have not dropped their ridiculous criminal investigation into Governor (Lisa) Cook. Anyone who thinks Donald Trump’s corrupt plan to take over the Fed is over is deluding themselves,” she said wrote on X and Bluesky tardy Friday morning, referencing Trump’s abrupt firing of executive governor Cook in February over alleged financial fraud.
Cook successfully challenged her dismissal in two lower courts. The US Supreme Court is examination whether Trump lawfully fired Cook.
Trump, who regularly posts about breaking news on his own social media platform Truth Social, had not commented on the announcement as of 12:30 p.m. Eastern Time.
During an unrelated event in the Oval Office on Thursday, Trump dodged a question about what he hoped to achieve from Pirro’s investigation into Powell and the Fed.
Instead, Trump responded that he could have completed the $25 million renovation of the Fed’s headquarters in Washington, D.C. and “would have had money left over.”
“On top of that, he was terrible on interest rates because he should have lowered interest rates. That’s why we call him Jerome ‘late’.” “Too late” – that’s his nickname – Jerome “too late” Powell. “He likes me a lot,” Trump said.
Jennifer Shutt contributed to this report.
