Fed: Washington prosecutor drops investigation against Jerome Powell
Source · Monetary Policy desk
— Summary
Federal prosecutor for Washington Jeanine Pirro has dropped the investigation into Jerome Powell, chair of the US Federal Reserve, over construction-cost overruns at the Fed's headquarters renovation, which rose from $1.9bn to $2.5bn. Going forward, the Fed's inspector general will examine the overruns, described as costing "several billion dollars" to taxpayers. The probe, opened in November by a prosecutor appointed by Donald Trump, accused Powell of "incompetence" and of having "pocketed money" on the construction work.
The decision is a win for Powell — whose term ends 15 May — in his standoff with the White House. Trump has repeatedly attacked him, calling him an "imbecile" and "truly one of my worst appointments", because the central banker has refused to cut interest rates for fear of reigniting inflation. In a rare video in January, Powell called the accusations "pretexts" and defended the Fed's independence against "political pressure".
Dropping the case removes a key obstacle to the Senate's confirmation of Kevin Warsh, Trump's pick to succeed Powell after mid-May. Republican Senator Thom Tillis, who had blocked the nomination while the investigation was running, confirmed on Sunday that he would now support it. A separate investigation into Fed governor Lisa Cook remains open. Source: Les Echos, 24 April 2026, Sarah Dumeau (with agencies).
Fed: Washington prosecutor drops investigation against Jerome Powell
The story in one line: the Washington federal prosecutor has dropped the case against Fed chair Jerome Powell, removing a major obstacle to confirming Kevin Warsh as his successor after mid-May.
Key numbers
$1.9bn → $2.5bn: cost overrun on the Fed headquarters renovation that triggered the probe.
15 May: end of Jerome Powell’s term.
November: opening of the investigation by a Trump-appointed prosecutor.
Fed Inspector General: now in charge of examining the overruns.
Kevin Warsh: Trump’s pick to succeed Powell; his confirmation had been blocked by Republican Senator Thom Tillis, who is now supportive.
Lisa Cook: Fed governor still under a separate investigation.
Why it matters
Three reads. First, this is a stress test for Fed independence: Powell, against White House preferences, has refused to cut rates for fear of inflation, and has insisted that monetary policy must not be dictated by “political pressure and intimidation”. Second, the likely arrival of Kevin Warsh — Trump’s pick — puts the Fed’s future stance at stake; Warsh has already had to publicly reject the idea that he would be Trump’s “puppet”. Third, the still-open probe into Lisa Cook shows the pressure on Fed governors does not end with Powell.
Takeaway
The institution comes out stronger in the short run, but the deeper question — who sets rates in the world’s most powerful monetary zone — is unresolved. Watch the tone of Kevin Warsh’s first communications after confirmation, and the inspector general’s conclusions on the cost overruns.
Source: Les Echos, 24 April 2026, Sarah Dumeau (with agencies).