NEED TO KNOW

• DOJ closed Powell criminal probe Friday, citing IG review
• Move clears Sen. Tillis hold on Warsh confirmation
• Pirro reserved right to restart investigation later

WASHINGTON, DC (TDR) — The Justice Department dropped its criminal investigation of Jerome Powell on April 24, hours before the Senate path cleared for President Trump's pick to replace him.

The big picture: The probe was already cornered. The question was when the administration would admit it.

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• A federal judge quashed the subpoenas in March, calling them pretext
• The DOJ never appealed to the D.C. Circuit before Friday's announcement
• One Republican senator's hold was the practical trigger

Why it matters: The Fed's interest-rate decisions move mortgage rates, business borrowing, and global markets, and a chair under criminal threat is a chair under leverage.

• Powell's term as chair expires May 15; his board seat runs through 2028
• The pressure structure around the Fed didn't end Friday. It got reorganized.

Driving the news: U.S. Attorney Jeanine Pirro announced the closure on X, framing it as deference to the inspector general's authority.

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• The Fed IG has reviewed the $2.5 billion renovation twice and found no wrongdoing
• Pirro's office made an unannounced visit to Fed headquarters days earlier and was turned away
• Jeanine Pirro, U.S. Attorney for D.C. — "I will not hesitate to restart a criminal investigation should the facts warrant doing so."

What they're saying: The closure landed differently across the aisle, but the underlying complaint was the same. This was never really about renovations.

• Sen. Elizabeth Warren, D-Mass. — "They threatened to restart the bogus criminal investigation into Fed Chair Powell at any time."
• Sen. Tim Scott, R-S.C., welcomed the IG handoff and invited a 90-day briefing
• White House spokeswoman Karoline Leavitt called the probe "not necessarily dropped", just "being moved over"

Yes, but: Closing the Powell file doesn't close the broader campaign against Fed independence.

• The parallel criminal probe of Fed Governor Lisa Cook over mortgage-application claims remains open
• Pirro's restart clause keeps the legal threat alive without the cost of an appeal

Between the lines: Pirro abandoned the appeal she publicly promised. That isn't deference to the IG — it's a calculation that losing again at the D.C. Circuit would set a worse precedent than walking away. The IG handoff lets the administration claim oversight continues while preserving the option to revive the criminal track if Warsh's confirmation stalls or a future Fed chair crosses the White House on rates.

What's next:

• Senate Banking Committee can now advance Warsh's nomination toward a floor vote
• Fed IG Michael Horowitz to deliver renovation report to Pirro's office
• Cook case pending before the Supreme Court
• Powell's board term keeps him on the rate-setting committee through 2028

If a criminal probe can be opened to pressure a Fed chair and closed to clear a confirmation vote, what stops either party from doing the same next time?

Sources

This report was compiled using information from CNBC, NBC News, CNN Business, The Washington Post, CBS News, NPR, The Hill, and Courthouse News Service, along with court filings from the U.S. District Court for the District of Columbia and statements from the Office of the U.S. Attorney for D.C.

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