In a significant development for financial markets and political observers, the Department of Justice (DOJ) has officially announced it will not reopen its criminal investigation into former Federal Reserve Chair Jerome Powell. The probe centered on the Federal Reserve's controversial multibillion-dollar headquarters renovation, a project plagued by cost overruns and oversight deficiencies.
"We're not reopening a criminal investigation into him," Attorney General Todd Blanche told Bloomberg in a Friday interview, putting an end to a period of uncertainty surrounding Powell's legal standing.
Jerome Powell, the 16th Chair for the U.S. Federal Reserve, during a moderated conversation at Harvard University in Cambridge, Massachusetts, US, on Monday, March 30, 2026.
Mel Musto | Bloomberg | Getty Images
While Blanche's statement closed the door on a direct criminal probe into Powell, he did not entirely rule out future Justice Department actions related to the renovation project. He indicated that an independent audit currently underway could still trigger an investigation if it uncovers evidence of criminal wrongdoing.
The DOJ's announcement comes just days after the Federal Reserve's own inspector general released a report finding "no reasonable grounds" to believe a federal crime had occurred warranting a referral to the attorney general. However, the watchdog's report was highly critical, detailing "major management and oversight failures" within the central bank that significantly contributed to the project's spiraling expenses.
The decision immediately drew a strong reaction from former President Donald Trump, who took to Truth Social on Wednesday to lambast the outcome. Trump asserted that Powell should be "forced to resign" from his current position on the Fed's Board of Governors "at a minimum."
"He can't manage a Building, and he certainly shouldn't be allowed to manage his High Interest Rate Policy (only on 'TRUMP!')," Trump wrote, continuing his long-standing criticism of Powell.
The Justice Department initially launched its renovation investigation in January, issuing grand jury subpoenas for related records. However, a federal judge quashed these subpoenas in March, ruling they were issued for an improper purpose and that the government had provided virtually no evidence of criminal activity by Powell. Despite disputing this ruling, the DOJ opted to close its investigation rather than pursue an appeal.
Meanwhile, Kevin Warsh, who succeeded Powell as Fed Chairman in May, has pledged to address the issues raised by the inspector general's report. Warsh stated the central bank would enlist an independent auditor and implement strengthened oversight mechanisms for the project moving forward. Jerome Powell continues to serve on the Fed's Board of Governors, with his separate term set to conclude on January 31, 2028.
Trump has consistently advocated for Powell's complete removal from the board, fueled by years of public disagreements over the Fed's interest-rate policies.
Ryan Ruggiero contributed to this report.
