The US Justice Department is discontinuing its investigation into Federal Reserve Chairman Jerome Powell in relation to alleged building cost overruns. This decision was announced by US Attorney Jeanine Pirro, who stated that the Fed's inspector general would take over with an internal review instead.
President Donald Trump has previously criticized the high costs of the Fed's building renovations, intensifying his long-standing conflict with Powell. As Powell's term nears its conclusion, the Senate is currently reviewing Trump's nomination of Kevin Warsh as his replacement, although key Republican Thom Tillis has expressed his refusal to back Warsh unless the investigation is dropped.
White House spokesman Kush Desai emphasized the need for clarity on the Federal Reserve's financial management, highlighting that the inspector general's authority is crucial for uncovering the facts. The White House remains optimistic about the Senate swiftly confirming Warsh, aiming to restore trust in the Federal Reserve's decision-making processes.
Trump's tensions with Powell heat up as he calls for interest rate reductions, suggesting that Powell's continued leadership could be at risk if he does not resign after his term. Powell has openly expressed concerns that the independence of the Fed is jeopardized by political pressures.
