DOJ investigates Federal Reserve Chair Powell

Summary

In November 2025, federal prosecutors in Washington, D.C., opened a criminal investigation into Federal Reserve Chair Jerome Powell over his testimony about the Fed headquarters renovation. Powell said the investigation was part of the Trump administration's push to pressure the Fed to lower interest rates; Trump denied any involvement. The DOJ dropped the investigation on April 24, 2026.

What happened

Trump repeatedly demanded lower interest rates and attacked Powell, saying in April 2025 that Powell's "termination cannot come soon enough." The DOJ investigation, run by U.S. Attorney Jeanine Pirro's office, examined Powell's congressional testimony about renovation cost overruns. Powell stated publicly the investigation was designed to pressure monetary policy decisions. The DOJ dropped the probe on April 24, 2026, which removed Sen. Thom Tillis's hold and thereby cleared the path for the Senate to confirm Trump's new Fed Chair nominee, Kevin Warsh, on May 13, 2026 (54-45), to succeed Powell, whose term expired May 2026.

Impact on the United States

Sen. Thom Tillis said the probe left no doubt that advisers in the administration were "actively pushing to end the independence of the Federal Reserve," and blocked Fed nominees, including the next chair, until it was dropped. A politically influenced Fed would lose credibility in fighting inflation, risking higher long-term interest rates for mortgages, auto loans, and business borrowing.

Documented effects

1. Trump said in April 2025 that Powell's "termination cannot come soon enough"; ABC News reported it was unclear whether he meant removing Powell or the end of Powell's term as chair.[7]
2. Mar 2026In March 2026, U.S. District Judge James Boasberg threw out the subpoenas prosecutors had sent to Powell.[3]
3. Apr 2026DOJ dropped the investigation April 24, 2026, clearing the path for Kevin Warsh's Senate confirmation as Powell's successor.[3][4][6]

Why this is rated limited

A criminal probe of the Fed Chair, which he said was meant to pressure rate decisions, raised concerns about Fed independence, but it was dropped without charges or policy capture, limiting realized harm.

DOJ dropped investigation April 24, 2026

Corrections & updates [5]

Every change to a fact on this page after publication is logged here, newest first.

1. Sep 29, 2026CorrectedEffects

   An effect said the dollar index fell from 104.2 to 103.2 in April 2025, citing a CBS News article. That article (published January 29, 2025, titled "The Federal Reserve should resist pressure from Trump and defend its independence, experts say") contains no such figure and predates the investigation, which began in November 2025; the effect and source have been replaced. The DOJ drop and the Warsh confirmation are now cited to reports from April 24, 2026 and the Senate roll call, instead of the January 2026 article that could not support them.[3][4][6]

2. Sep 29, 2026ClarifiedSource

   The November 2025 start of the investigation, and Pirro's office leading it, are now sourced to NBC News (January 12, 2026), citing three people familiar with the probe.[5]

3. Sep 29, 2026CorrectedSummary

   The subheading said the probe was dropped "after Powell's term" and called it "politically motivated" as a statement of fact. The DOJ dropped it on April 24, 2026, before Powell's term as chair ended in May 2026; the motive is Powell's stated view, now attributed to him.[1][3]

   Previously

   A politically motivated probe threatened monetary independence before being dropped after Powell's term.

   Now

   A criminal probe that Powell said was meant to pressure the Fed on rates was dropped in April 2026, before his term as chair ended.

4. Sep 29, 2026CorrectedSummary

   The entry said Trump drafted a termination letter for Powell, that he urged Powell to resign, that "analysts" called the probe coercion, and that the threats caused dollar weakness and yield volatility. None of the cited sources supports these claims, so they are removed. The entry now says what the sources report: Trump said in April 2025 that Powell's "termination cannot come soon enough" (ABC News said it was unclear whether he meant removing Powell or the end of his term). Powell said the probe was part of the administration's pressure on the Fed to lower rates; Trump denied involvement. Sen. Thom Tillis blocked Fed nominees until the probe was dropped. The display text wrongly said the probe was dropped after Warsh's confirmation. It was dropped April 24, 2026, and Warsh was confirmed May 13.[1][3][6][7]

5. Sep 29, 2026CorrectedSeverity rationale

   The rationale said the probe 'rattled markets'; that is not in the entry's record and was removed. Severity unchanged.[3][4]

   + Show previous and current text- Hide previous and current text

   Previously

   A criminal probe of the Fed Chair rattled markets and threatened independence, but it was dropped without policy capture, limiting realized harm.

   Now

   A criminal probe of the Fed Chair, which he said was meant to pressure rate decisions, raised concerns about Fed independence, but it was dropped without charges or policy capture, limiting realized harm.

Sources [6]