Judge Dismisses Trump's Criminal Probe of Fed Chair Powell

President Donald Trump initiated a pressure campaign against the Federal Reserve in January 2026, culminating in a criminal investigation led by U.S. Attorney Jeanine Pirro. The Department of Justice issued grand jury subpoenas on January 9, alleging Chair Jerome Powell misled Congress regarding cost overruns for a headquarters renovation in Washington, D.C., which rose from $1.9 billion to $2.6 billion.

Jerome Powell denounced the probe as a "pretext" and a retaliation for the Federal Reserve's refusal to lower interest rates according to the president's preferences. The conflict triggered significant market volatility, record gold prices, and international condemnation from central banks and the Bank for International Settlements. Simultaneously, the Supreme Court heard arguments regarding Trump's attempt to fire Fed Governor Lisa Cook over allegations of mortgage fraud, which Cook denied.

By March 2026, U.S. District Judge James Boasberg dismissed the criminal case against Powell due to a lack of evidence, though Pirro indicated intentions to appeal. Despite the dismissal, the political fallout persisted; Senator Thom Tillis vowed to block the confirmation of Trump's nominee for chair, Kevin Warsh, until the inquiry was fully resolved. Powell, whose term as chair expired May 15, 2026, signaled his intent to remain on the Board of Governors until 2028 to preserve the institution's autonomy from executive interference.