The criminal investigation into Federal Reserve Chair Jerome Powell has been dropped, clearing the way for Kevin Warsh’s confirmation as his successor. The probe, which alleged $2.5 billion in excessive spending on Fed headquarters renovations, found no evidence of wrongdoing, according to District Attorney Jeanine Pirro, who announced the dismissal on April 24, 2026. Pirro noted that internal oversight would continue and warned charges could be reinstated if justified. Powell had previously broken precedent by going public with the investigation, framing it as political pressure to influence interest rate decisions. His public stance underscored his defense of the Fed’s independence amid criticism from Trump over rate policy. The timing is critical: with Republicans holding a 13–11 edge on the Senate Banking Committee, Senator Thom Tillis had tied his support for Warsh to the resolution of the probe. Now cleared, that barrier is removed. Powell’s term ends May 15, 2026; if Warsh isn’t confirmed by then, Powell may serve in an acting role. The case’s closure removes a major hurdle to leadership transition at the Fed, though questions about oversight and political influence remain.

The criminal investigation into Federal Reserve Chairman Jerome Powell over alleged renovation overspend has been dropped, removing a key obstacle to the confirmation of his Trump-nominated successor, Kevin Warsh.

The probe, which centered on claims of $2.5 billion in excessive costs for a Fed headquarters renovation, yielded no evidence of wrongdoing by Powell, according to District Attorney Jeanine Pirro, a Trump ally who announced the discontinuation on April 24, 2026. Pirro emphasized that the Federal Reserve’s internal oversight would continue reviewing the renovation expenses and warned that criminal proceedings could be reopened “if the facts justify it.”

Powell had broken with precedent in January by going public with the investigation, framing it as an attempt to pressure the Fed into aligning its interest rate decisions with presidential preferences. “The threat of indictment follows from the Fed setting rates based on public interest, not the president’s wishes,” he stated at the time, underscoring his defense of institutional independence amid sustained criticism from Trump over the central bank’s reluctance to cut rates.

The timing of the dismissal carries significant weight for the Senate Banking Committee, where Republicans hold a slim 13-to-11 majority. During Warsh’s confirmation hearing the prior Tuesday, Senator Thom Tillis had explicitly linked his support to the resolution of the probe, saying, “Let us clear this investigation from the way so I can support your confirmation.” With the criminal case now closed, that procedural barrier has been eliminated.

For more on this story, see US prosecutors close investigation into Jerome Powell’s Federal Reserve renovation spending, refer matter to internal oversight.

Still, Powell’s term as Fed Chair ends on May 15, 2026. If no successor is confirmed by then, he has indicated he may continue in an acting capacity. The White House, through spokesperson Kush Desair, expressed confidence that the Senate would swiftly approve Warsh, whereas Senator Elizabeth Warren reiterated her opposition, citing concerns that Warsh would compromise the Fed’s independence under political pressure.

Why was the investigation dropped despite the high dollar amount involved?

Investigators found no evidence that Jerome Powell personally benefited from or authorized improper spending on the Fed’s renovation project, leading prosecutors to conclude there was no basis for criminal charges.

What happens if Kevin Warsh is not confirmed before Powell’s term ends?

Jerome Powell has stated he may continue to lead the Federal Reserve in an acting role beyond May 15, 2026, if a successor has not been confirmed by the Senate.