The US justice department is dropping its investigation into the Federal Reserve chairman, Jerome Powell, over alleged building cost overruns.
US Attorney Jeanine Pirro stated that instead there would be an internal investigation led by the central bank's inspector general.
President Donald Trump has previously criticized the Federal Reserve's renovation costs, claiming they were too high, amid a longstanding dispute with Powell.
Powell's term is approaching its end, with the Senate evaluating Trump's nominee for his successor, Kevin Warsh. Notably, Republican member Thom Tillis has reserved his support for Warsh pending the government's withdrawal from the investigation into Powell.
White House spokesperson Kush Desai issued a statement asserting, American taxpayers deserve answers about the Federal Reserve's fiscal mismanagement, and the Office of the Inspector General's more powerful authorities best position it to get to the bottom of the matter. He expressed confidence in a swift Senate confirmation for Warsh to restore integrity to Fed operations.
Pirro indicated on social media that she would not hesitate to restart a criminal investigation if warranted.
The Fed's inspector general noted that it is working to finalize its review, with results to be shared with the public and Congress upon completion.
In the context of Powell's tumultuous tenure marked by Trump's vocal disapproval, Powell previously described the investigation as unprecedented and believed it was fueled by political pressures regarding interest rate policies. This case highlights the ongoing tensions around the independence of the Federal Reserve amid political influences.
Trump's attempts to influence Fed policy and recent threats to fire Powell underscore the fraught relationship between the White House and the central bank, as Powell's term officially ends on May 15, with ongoing discussions about his successor.
