• DC US Attorney Jeanine Pirro launched Powell investigation without notifying White House or Treasury
• Officials scrambled to calm markets and distance Trump from unprecedented criminal probe
• Republican senators threaten to block Fed nominees until investigation resolved

WASHINGTON, DC (TDR) — Senior White House officials are privately blaming Washington, D.C. U.S. Attorney Jeanine Pirro for launching a criminal investigation into Federal Reserve Chair Jerome Powell without warning, an inquiry that has forced the administration into days of damage control and reignited concerns over the independence of the central bank, according to four people familiar with the matter.

The emergence of the criminal probe earlier this week surprised and dismayed senior officials across the government. Inside the White House, officials scrambled to calm markets and reassure lawmakers while attempting to put distance between President Donald Trump and the investigation, even though Trump himself has been one of Powell’s most strident critics.

Investigation Blindsided Administration

Pirro’s office did not contact the White House, Treasury Department, or main Justice Department before issuing grand jury subpoenas to the Federal Reserve on Friday, according to multiple sources. The lack of coordination threw into disarray the White House’s plan to wait out the final months of Powell’s term in relative peace.

“White House officials are heaping blame on DC US Attorney Jeanine Pirro over her office’s criminal investigation into Fed Chair Jerome Powell, faulting her for blindsiding them with an inquiry that has forced the administration into a dayslong damage control campaign,” CNN reported.

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Trump aides said they felt significant frustration with Pirro, who they felt had upended efforts over the last several months to tamp down the president’s attacks on Powell. The former Fox News host turned federal prosecutor opened the investigation in November but issued subpoenas without explicit warning to Fed staff.

“The United States Attorney’s Office contacted the Federal Reserve on multiple occasions to discuss cost overruns and the chairman’s congressional testimony, but were ignored, necessitating the use of legal process—which is not a threat,” Pirro said in a statement Monday.

After opening the investigation, Pirro’s office sent Federal Reserve staff two emails over the December holidays seeking conversations, according to sources. Those messages made no explicit mention of a criminal investigation or the possibility of issuing a subpoena. Within days of those initial emails, which Fed staff had not yet responded to, Pirro’s office served the central bank with a subpoena.

Bessent’s Failed Intervention

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Treasury Secretary Scott Bessent expressed frustration over the move, telling associates he had tried to prevent the investigation late last year and believed he had succeeded. When Bessent discovered the probe was moving forward last week, he called Trump directly on Friday night to express concerns that the investigation could impede plans to confirm a new Federal Reserve chair.

“Even Trump’s Treasury Secretary Scott Bessent told people he was frustrated by the move,” sources told CNN.

Bessent had been helping guide a selection process for Trump’s new nominee for Fed chair ahead of an official announcement expected in the coming weeks. The inquiry into Powell now threatens to complicate that timeline by casting further doubt on the administration’s insistence that it respects the Fed’s longstanding independence.

Pulte’s Pressure Campaign

White House aides have also pointed fingers at Federal Housing Finance Agency Director Bill Pulte, an outspoken Powell critic who had been pushing for an investigation, including recently presenting Trump with a wanted poster of the Fed chair, according to White House officials and sources familiar with the matter.

“The Housing regulator who’s been trying to turn the mortgage records of Trump’s political opponents into criminal charges brought a Powell ‘wanted poster’ to Mar-a-Lago, championed the investigation, flew on Air Force One the day subpoenas were served, then claimed on TV, ‘I don’t know anything about it,'” Newsweek reported.

Pulte has denied involvement in the investigation. White House communications director Steven Cheung defended Pulte in a statement.

“Bill Pulte is a patriot and has the full confidence of President Trump,” Cheung said.

Republican Opposition Intensifies

Multiple Republican senators have criticized the investigation, threatening Trump’s plans to replace Powell when his term expires in May. Sen. Thom Tillis (R-NC), who sits on the Senate Banking Committee that oversees the Federal Reserve, vowed to withhold his vote on any nominee to replace Powell for as long as the inquiry remains open.

“Until this matter is resolved, I’m not considering anybody,” Tillis said Tuesday. “I wouldn’t consider my mother for the post under the current conditions.”

Senate Majority Leader John Thune (R-SD) took the rare step of weighing in on the investigation.

“It’s really important that it get resolved quickly and that there not be any appearance of political interference with the Fed or its activities,” Thune said.

Sen. Kevin Cramer (R-ND), a Banking Committee member and frequent Powell critic, also questioned the investigation.

“Jerome Powell is a bad Fed Chair who has been elusive with Congress, especially regarding the overruns of the elaborate renovations of the building,” Cramer said. “I do not believe however, he is a criminal. I hope this criminal investigation can be put to rest quickly, along with the remainder of Jerome Powell’s term.”

Powell’s Rebuttal

Powell confirmed Sunday that the Justice Department served the Federal Reserve with grand jury subpoenas on Friday, describing the move as a threat of criminal indictment related to his June testimony before the Senate Banking Committee about the $2.5 billion renovation of Fed headquarters.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said in his statement.

Powell noted the investigation should be seen in the broader context of the administration’s threats and ongoing pressure against the central bank. The Fed chair’s term expires in May, though he could remain on the Board of Governors until 2028.

Pirro Defends Investigation

On Fox News Tuesday night, Pirro defended her decision to open the investigation, calling Powell’s response a “crazy video.”

“We’re talking about $1 billion in cost overruns in DC and something that is purely in my lane as the United States attorney to investigate,” she said, arguing the subpoena was necessary to get Powell to respond. “If they had responded, I wouldn’t be sitting here right now.”

The investigation centers on whether Powell was truthful during congressional testimony about cost overruns in renovating the Fed’s two main buildings. Rep. Anna Paulina Luna (R-FL) referred Powell to the Justice Department in July, alleging he misrepresented the scope and features of the renovation project.

Trump denied knowledge of the investigation in an interview Sunday but added Powell was “certainly not very good at the Fed, and he’s not very good at building buildings.” At a White House event last week, Trump delivered a mostly critical lecture to U.S. Attorneys, suggesting some were weak and ineffective.

Will the Powell investigation derail Trump’s plans to reshape Federal Reserve leadership?

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