DOJ closes Powell renovation probe; Trump demands resignation
The Department of Justice will not reopen its criminal investigation into former Federal Reserve Chair Jerome Powell regarding the central bank’s headquarters renovation. Attorney General Todd Blanche confirmed this decision, noting that while the probe is closed, separate action could occur if an independent audit reveals criminal wrongdoing. This follows a report by the Fed’s inspector general, which found no basis for a criminal referral but cited major oversight failures that caused renovation costs to more than double. President Trump rejected the findings, demanding Powell resign from the Board of Governors, where he remains a member through January 2028.
Key points
- Attorney General Todd Blanche stated the DOJ will not reopen the criminal investigation into Jerome Powell over the Fed headquarters renovation.
- The Federal Reserve’s inspector general found no reasonable grounds for a federal crime but faulted the central bank for major management and oversight failures.
- Renovation costs more than doubled, reaching approximately $2.5 billion, according to prior reports.
- President Trump criticized the decision and demanded Powell resign from the Board of Governors, citing his inability to manage the building or interest-rate policy.
- Powell stepped down as chair in May when Kevin Warsh took over but remains a Fed governor until January 31, 2028.
Background
The DOJ initially opened the investigation in January 2026, issuing grand jury subpoenas that were later quashed by a federal judge in March for improper purpose. The department closed the case rather than appeal. In September, Trump publicly supported new Fed Chair Kevin Warsh after a rate hike, signaling potential influence over central bank leadership. The current dispute continues a long-standing clash between Trump and Powell over interest-rate policy and institutional independence.
Why it matters
The closure of the criminal probe removes a legal threat against Powell but does not end political pressure. Trump’s demand for resignation highlights ongoing tensions between the executive branch and the Federal Reserve, potentially affecting central bank independence and future monetary policy decisions. The independent audit ordered by Warsh may still uncover issues, keeping the renovation project in the public eye.
What to watch
The Federal Reserve will conduct an independent audit of the renovation project to seek reimbursement for unperformed work and strengthen oversight. Powell will remain on the Board of Governors until January 2028, though Trump continues to press for his departure. The DOJ has not ruled out future action if the audit reveals evidence of criminal wrongdoing.
- DOJ says it will not reopen criminal probe into former Fed Chair Powell CNBC
- Trump Says Jerome Powell Should Be ‘Forced’ To Resign Forbes
- Fed's Warsh cracks down on HQ renovation, taps GSA to lead Fox Business
- Fed’s Watchdog Finds No Misconduct or Illegal Activity in Costly Renovations The New York Times
- Opinion | The End of the Fed Building Fiasco WSJ
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