In brief
The U.S. Justice Department has concluded its investigation into Federal Reserve Chairman Jerome Powell concerning allegations of excessive renovation costs for Fed buildings. Instead, an internal inquiry will be conducted by the Federal Reserve's inspector general. This development unfolds amid ongoing political tensions, as President Trump continues to challenge Powell's tenure, voicing concerns over renovation costs that he claims exceeded forecasts. With Powell’s term nearing expiration, the Senate is in deliberation over Trump's nominee for replacement, Kevin Warsh, highlighting the central bank's political landscape and its independence.
The US justice department is dropping its investigation into the Federal Reserve chairman, Jerome Powell, over alleged building cost overruns.
US Attorney Jeanine Pirro said instead there would be an internal investigation led by the central bank's inspector general.
President Donald Trump has said the cost of the Fed's building renovations were too high, as part of a long-standing feud with Powell.
Powell's term is nearing its end and the US Senate is considering Trump's nominee for his replacement, Kevin Warsh. A key Republican, Thom Tillis, has withheld his support for Warsh unless the Trump administration would drop its investigation into Powell.
American taxpayers deserve answers about the Federal Reserve's fiscal mismanagement, and the Office of the Inspector General's more powerful authorities best position it to get to the bottom of the matter, said White House spokesman Kush Desai in a statement.
Prior to this change, Powell had faced significant pressure, revealing that subpoenas had been issued concerning the building renovations and the possibility of criminal charges.
Last summer, Trump criticized the escalating costs of the renovations, arguing they would total $3.1 billion, significantly higher than the Fed's projected $2.5 billion. Powell defended the renovations as essential to modernizing the central bank's facilities, explaining that they would ultimately save costs over time.
This investigation and related tensions have underscored the strained relationship between Trump and Powell, particularly regarding monetary policy and interest rates. Powell has maintained that the Federal Reserve must remain independent and make decisions based on economic data rather than political pressure.
As Powell's tenure approaches its conclusion, he intends to remain in his position until a successor is confirmed by the Senate, amid a backdrop of public scrutiny and political maneuvering.
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