DOJ Drops Powell Probe, Clears Path for Warsh at Fed

The U.S. Department of Justice dropped its criminal probe of Federal Reserve Chair Jerome Powell on Friday, removing a major hurdle to the Senate confirmation of Kevin Warsh as Trump's nominee to lead the central bank. The reversal came just two days after U.S. Attorney Jeanine Pirro had publicly insisted the investigation would continue.

A Sudden About-Face

According to reporting from CNBC, CNN Business, NBC News and PBS NewsHour, Pirro announced on X that her office was ending its criminal probe into Federal Reserve building-renovation cost overruns and into Powell personally. The Fed's own Inspector General will now investigate the multi-billion-dollar headquarters renovation. The DOJ investigation had been launched in January 2026 after Trump publicly pressured Powell to cut interest rates.

Chief Judge James Boasberg of the U.S. District Court for the District of Columbia had previously quashed subpoenas from Pirro's office, describing them as a "pretext" designed to pressure Powell. Bloomberg and the Washington Times both reported the closure on Friday.

Clearing the Runway for Warsh

The move removes the biggest remaining obstacle to Warsh's Senate confirmation. Sen. Thom Tillis of North Carolina had been blocking the nomination pending resolution of the Powell probe, per CNBC. With the investigation shut down, Senate Republicans are expected to move quickly to confirm Warsh before Powell's term expires.

The Political Subtext

The pivot reads as a tacit acknowledgment that the administration's courtroom strategy against Powell had run aground. Having lost the subpoena fight before Judge Boasberg, the White House appears to have calculated that dropping the probe and accelerating Warsh's confirmation is the faster route to reshaping Fed leadership.

For markets, the resolution is the clearest signal yet that Warsh will be the next Fed chair, a pivot with major implications for the 2026 rate path.