DOJ opened criminal probe of Federal Reserve Chair Powell with no evidence, using renovation costs as pretext for Trump's rate-policy feud

Around January 11, 2026, the U.S. Department of Justice served the Federal Reserve Board of Governors with grand jury subpoenas, opening a criminal investigation of Chair Jerome Powell over cost overruns in the Fed's $2.5 billion Washington headquarters renovation. The probe began after months of public attacks by President Trump on Powell, who had declined to lower interest rates as quickly as Trump demanded — attacks that ranged from public insults to accusations of incompetence and impropriety. Powell said after receiving the subpoenas that the criminal threat was "a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public."

At a March 3, 2026 hearing before U.S. District Judge James Boasberg — chief judge of the D.C. federal district court — lead prosecutor George A. Massucco-LaTaif was asked directly what evidence existed of fraud or criminal misconduct related to the renovations. "We do not know at this time," he replied. "However, there are 1.2 billion reasons for us to look into it." Massucco-LaTaif argued that prosecutors did not need "grand suspicion of illegal activity" to proceed, saying "it can be something as simple as a tip or a rumor."

On March 13, Boasberg quashed the subpoenas. In his ruling, he wrote that "a mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning." The government, he found, had produced "essentially zero evidence to suspect Chair Powell of a crime," and the stated justifications were "so thin and unsubstantiated" as to be "pretextual."

The stakes of the investigation extended beyond Powell personally. His term as Fed chair was set to expire in May 2026, and Trump had already nominated former Fed Governor Kevin Warsh as his replacement. Republican Sen. Thom Tillis, a key vote on the Senate Banking Committee, said the committee should not vote on the Warsh nomination until the criminal probe of Powell was resolved — effectively using the investigation to hold the committee hostage on central bank succession during a critical monetary policy period.

Updates

2026-03-13 — Judge quashed subpoenas; found investigation was "pretextual" pressure campaign [2]

Judge Boasberg blocked the DOJ's subpoenas, ruling that the government had produced essentially no evidence of any crime by Powell and that the investigation's sole apparent purpose was to pressure the Fed chair to lower interest rates or resign — a finding that treated the criminal process as an instrument of executive branch monetary policy.

2026-03-24 — Unsealed court transcript revealed prosecutor admitted no evidence during March 3 hearing [3]

A newly unsealed transcript of the March 3 hearing, first reported by the Washington Post and confirmed by CNN, revealed that Massucco-LaTaif had told Boasberg the office did not know at that time what evidence of fraud or criminal misconduct existed. The transcript made public that the admission of evidentiary absence had occurred before the subpoenas were quashed.

2026-04-24 — DOJ dropped criminal probe of Powell, removing the hurdle to Trump's Warsh nomination [4]

The Justice Department announced April 24, 2026 that it was ending the criminal investigation of Federal Reserve Chair Jerome Powell. The decision came after Judge Boasberg quashed the subpoenas and found the probe pretextual. DOJ's withdrawal cleared the Senate Banking Committee obstacle that Sen. Thom Tillis had cited — a hold on Trump's nomination of Kevin Warsh as Powell's successor — by removing the pending probe as a reason to delay confirmation proceedings.

2026-05-13 — Senate confirmed Kevin Warsh as Federal Reserve chair 54–45, completing Powell succession [5]

The Senate confirmed Kevin Warsh as the next Federal Reserve chair on May 13, 2026, by a 54–45 vote. The confirmation proceeded after the Justice Department dropped its criminal probe of Jerome Powell in April, removing the Senate Banking Committee hold that Sen. Tillis had cited as a reason to delay action on the Warsh nomination.