Judge Blocks Powell Subpoenas in Federal Reserve Probe/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ A federal judge has thrown out subpoenas issued to the Federal Reserve as part of a Justice Department investigation into Chair Jerome Powell. The ruling says prosecutors produced virtually no evidence of wrongdoing related to Powell’s testimony on a building renovation project. The decision also complicates Senate consideration of Kevin Warsh, President Trump’s nominee to replace Powell.
Jerome Powell Subpoena Ruling Quick Looks
- A federal judge quashed Justice Department subpoenas targeting the Federal Reserve.
- The investigation focused on Jerome Powell’s testimony about a $2.5 billion renovation project.
- Judge James Boasberg said the government presented “essentially zero evidence” of a crime.
- Prosecutors claimed Powell may have made false statements to Congress.
- U.S. Attorney Jeanine Pirro plans to appeal the ruling.
- The legal dispute is delaying the Senate confirmation process for Kevin Warsh, Trump’s Fed chair nominee.
- Powell’s current term as Fed chair ends May 15, though his board term runs until 2028.
Jerome Powell Investigation Ruling Quick Looks
Judge Blocks Subpoenas in Federal Reserve Investigation
A federal judge has struck down subpoenas issued to the Federal Reserve in a Justice Department investigation into Chair Jerome Powell, delivering a major setback to prosecutors examining his testimony about the central bank’s costly headquarters renovation.
U.S. District Judge James Boasberg ruled that the government failed to provide credible evidence that Powell committed a crime. The subpoenas were issued in January as part of an inquiry into Powell’s statements to lawmakers last June regarding the Federal Reserve’s multibillion-dollar construction project.
Boasberg wrote that prosecutors had produced “essentially zero evidence” suggesting criminal wrongdoing and said the justification for the subpoenas appeared weak and unsupported.
According to the ruling, the government’s reasoning suggested the subpoenas may have been intended to pressure Powell rather than pursue a legitimate criminal investigation.
The judge wrote that the evidence pointed toward an effort to “harass and pressure” Powell either to change monetary policy decisions or step down as chair.
Investigation Focused on Fed Renovation Project
The Justice Department investigation centered on Powell’s testimony before the Senate Banking Committee in June.
During the hearing, Powell was questioned about cost overruns tied to renovations of several Federal Reserve buildings in Washington.
The project’s estimated cost has risen to roughly $2.5 billion, about $600 million higher than an earlier estimate made in 2022.
Powell told lawmakers that certain luxury features — including rooftop gardens and special elevators — were not part of the renovation.
Administration officials later argued that earlier design plans included some of those elements, raising questions about whether Powell had misled Congress or relied on outdated information.
Prosecutors said they were examining possible fraud or false statements connected to the testimony.
Justice Department Plans Appeal
The ruling blocks U.S. Attorney Jeanine Pirro from obtaining Federal Reserve records related to the renovation project.
Pirro criticized the decision during a press conference, calling the judge’s ruling unjustified and accusing the court of interfering with a grand jury investigation.
She said her office intends to appeal the decision.
Pirro argued that the investigation was focused on a massive construction cost overrun and said the judge’s ruling undermined the ability of prosecutors to examine potential wrongdoing.
Political Pressure on the Federal Reserve
The case has drawn intense political scrutiny because it comes amid ongoing tensions between the White House and the Federal Reserve.
For decades, the central bank has been considered independent from day-to-day political pressure.
However, the Trump administration has repeatedly criticized Powell over interest rate policy and other economic decisions.
The administration has also attempted to remove Federal Reserve Governor Lisa Cook from the board after allegations of mortgage fraud surfaced. No criminal charges were filed, and the Supreme Court has temporarily blocked efforts to dismiss her.
These disputes have raised broader questions about the independence of the Federal Reserve and whether political pressure could influence monetary policy decisions.
Impact on Fed Leadership Transition
The legal dispute has also complicated the Senate confirmation process for Kevin Warsh, President Trump’s nominee to replace Powell as Federal Reserve chair.
Powell’s term as chair expires on May 15, but he could remain in office longer if a successor is not confirmed.
Senator Thom Tillis, a Republican member of the Senate Banking Committee, has blocked consideration of Warsh’s nomination while the investigation into Powell continues.
Tillis said the court ruling demonstrates how weak the case against Powell is and urged prosecutors to abandon the investigation.
He warned that appealing the decision would only delay Warsh’s confirmation further.
Because Republicans hold only a narrow majority on the banking committee, Tillis has enough leverage to prevent the nomination from advancing if Democrats also oppose it.
Questions About Powell’s Future at the Fed
Another unresolved question involves Powell’s future role on the Federal Reserve board after his term as chair ends.
Powell also serves as a Fed governor under a separate term that runs until January 2028.
Traditionally, Federal Reserve chairs step down from the board when their leadership term ends. Powell has declined to say whether he plans to follow that practice.
If Powell stays on the board, it would prevent the president from immediately appointing another governor.
Court filings related to the investigation suggested Powell might remain on the board if the legal case continues, though he has not made any final decision.
Judge Criticizes Lack of Evidence
In his decision, Boasberg said he offered prosecutors the chance to present additional evidence privately to the court if they did not want to reveal details to Powell or the Federal Reserve.
The government declined that option.
As a result, the judge said he had no credible reason to believe prosecutors were investigating suspicious activity rather than targeting a specific official.
The ruling represents one of the most significant legal setbacks so far in the Justice Department’s effort to pursue the investigation.
Whether the case continues may depend on the outcome of the government’s planned appeal.
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