The US Justice Department has closed its criminal investigation into the Federal Reserve and its Chair Jerome Powell, transferring the matter to the central bank's inspector general, according to Bloomberg.
Jeanine Pirro, the US Attorney for the District of Columbia, said in a post on X that the watchdog had been asked to “scrutinize the building cost overruns, in the billions of dollars, that have been borne by taxpayers.”
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said, adding, “I expect a comprehensive report in short order.”
She also cautioned that she would “not hesitate to restart a criminal investigation should the facts warrant doing so.”
The probe had centred on whether Powell misled Congress about the cost of renovations at the Fed's Washington headquarters. However, the inquiry suffered a major setback after Chief Judge James E. Boasberg blocked prosecutors from issuing grand jury subpoenas, describing the move as an attempt to harass and pressure Powell either to yield to the president or to resign.
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According to The New York Times, prosecutors later acknowledged in court that they lacked evidence of criminal wrongdoing.
The decision to drop the investigation could have wider implications. It removes a key obstacle to President Donald Trump's nomination of Kevin Warsh as the next Fed chair, with some Republican lawmakers earlier vowing to block confirmations until the probe concluded.
Powell, whose term ends on May 15, has previously criticised the investigation as politically motivated, warning it risked undermining the Fed's independence.
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