The Justice Department has concluded its inquiry into cost escalations during the refurbishment of the Federal Reserve facilities under the leadership of chairman Jerome Powell, as announced by U.S. Attorney Jeanine Pirro on Friday. Pirro revealed that the Federal Reserve’s Inspector General has been tasked with examining the construction expenses.
In a social media post, Pirro stated that the Inspector General possesses the authority to ensure accountability to American taxpayers. She anticipates a detailed report promptly and believes it will aid in addressing the lingering queries that prompted the issuance of subpoenas by her office. However, Pirro emphasized her readiness to reopen a criminal investigation if warranted by the facts.
Notably, a federal judge recently blocked subpoenas directed at the Fed’s board of governors, ruling that they were improperly issued to pressure Powell into conceding to President Donald Trump’s requests for swift interest rate reductions or resignation. Despite this setback, Pirro had intended to challenge the ruling and continue the investigation. Powell’s term as chairperson is slated to conclude on May 15.
The inquiry led by Pirro influenced Powell’s stance on retaining a seat as a Fed governor until 2028, the final year of Trump’s presidency. It is customary for Fed chiefs to step down from the board upon the expiration of their leadership terms.
The Trump administration’s actions against Powell, including the criminal probe, risked delaying the Senate’s confirmation of Kevin Warsh, Trump’s nominee to replace Powell. Senator Thom Tillis of North Carolina, a Republican member of the Senate’s banking committee, criticized the investigation as an unwarranted attack on the Fed’s autonomy and pledged to block Warsh’s confirmation until the matter is resolved.
Democratic Senator Elizabeth Warren and former Federal Reserve leaders condemned the cost investigation as a pretext to undermine the Fed’s independence from the White House. Trump’s inaccurate assertions regarding the renovation costs, which necessitated a correction from Powell during a joint appearance, have fueled this criticism. Three of the Fed’s current governors were appointed by former President Joe Biden, including Lisa Cook, whose dismissal the Trump administration has sought through a pending case in the U.S. Supreme Court.
Warsh, a former Fed governor, emphasized the significance of monetary policy independence during his remarks to U.S. senators. He refuted any commitments to Trump regarding interest rate adjustments and distanced himself from Trump’s expectations of immediate rate cuts under his potential leadership. Warsh also attributed the ongoing inflation surge post-COVID-19 to the policies under Powell’s stewardship.