The US Justice Department has dropped its investigation into Federal Reserve Chair Jerome Powell regarding alleged cost overruns linked to the renovation of the central bank’s historic buildings.
US Attorney Jeanine Pirro confirmed that the inquiry will no longer be pursued by the Justice Department and will instead be handled internally by the Federal Reserve’s inspector general.
The investigation centered on renovation work at the Eccles Building and 1951 Constitution Avenue, which are undergoing their first major upgrades since their construction in the 1930s. The project includes essential modernization and safety improvements, such as the removal of asbestos and lead contamination.
The Federal Reserve has maintained that the renovation will ultimately reduce long-term operational costs, despite estimates rising above initial projections. Former President Donald Trump had previously criticized the project, claiming costs had ballooned to around $3.1 billion compared to an earlier estimate of $2.5 billion.
The decision to drop the probe comes amid ongoing political tension between Trump and Powell, who has been at odds with the administration over interest rate policy and the independence of the central bank.
White House spokesperson Kush Desai said taxpayers deserve accountability in federal spending and supported the inspector general’s role in reviewing the matter. He also expressed confidence that the Senate will confirm Trump’s nominee for Federal Reserve Chair, Kevin Warsh.
The dispute has also intensified as Powell’s term nears its end on May 15. Trump has repeatedly criticized Powell and even suggested he could be removed from office, while Powell has warned against political interference in monetary policy.
In January, Powell publicly disclosed that the Justice Department had issued subpoenas and considered a potential criminal indictment related to his Senate testimony on the renovation project. He described the investigation as “unprecedented” and suggested it stemmed from political pressure over interest rate decisions.
Powell has consistently defended the Federal Reserve’s independence, stating that monetary policy should be based on economic data rather than political influence.
He is expected to remain in office until a successor is confirmed by the US Senate.
