Justice Dept ends criminal probe into US Fed chair Powell

The U.S. Justice Department said Friday it is dropping a criminal probe on Federal Reserve Chair Jerome Powell, paving the way for his replacement's Senate confirmation, amid concerns over President Donald Trump's attacks on the independent central bank.

"I have directed my office to close our investigation," U.S. Attorney Jeanine Pirro announced on X.

Pirro said the inspector general for the Fed would instead look into renovation cost overruns at its headquarters, which the Justice Department had been probing -- under heavy pressure from Trump.

However, she added that she would "not hesitate to restart a criminal investigation should the facts warrant doing so."

Trump has upended Washington norms by routinely criticizing the Fed for not following his calls to cut interest rates more rapidly, while making personal attacks on Powell in particular.

The probe into Powell, whose term helming the Fed expires May 15, looked likely to hold up the Senate's confirmation of Trump's pick for a new chairman, Kevin Warsh.

Now, Pirro's announcement is set to ease that path.

The investigation had been criticized by former Fed chiefs and lawmakers as an attempt to undermine the central bank's independence from politics.

At Warsh's confirmation hearing this week before the Senate Banking Committee, Republican senator Thom Tillis reiterated that he would continue blocking new appointments to the Fed if the Powell investigation were not resolved.

Tillis's vote against the appointment would have been enough to set up an impasse on the panel, which Warsh needs to clear to become the next Fed chief.

"Senator Tillis should do the right thing and move to confirm Kevin Warsh as speedily as possible," White House Press Secretary Karoline Leavitt urged Friday.

"He is a phenomenal candidate to lead the Fed, and we shouldn't be holding our nation's economy hostage because of a disagreement with the Department of Justice," Leavitt told reporters.

AFP