Senate Confirmation Likely for Kevin Warsh as Justice Department Clears Federal Reserve Chair in Investigation Over Building Renovations

The Justice Department has concluded its criminal investigation into Federal Reserve Chair Jerome Powell, removing a significant obstacle to the confirmation of Kevin Warsh as the next chair of the U.S. Central bank.

The probe, which examined cost overruns during the renovation of two Federal Reserve buildings, found no evidence of criminal conduct by Powell or other officials. This conclusion follows a prior judicial dismissal of subpoenas related to the investigation.

U.S. Attorney for the District of Columbia Jeanine Pirro had led the inquiry into allegations of mismanagement in the Fed’s renovation project, which saw costs rise from an initial estimate of $1.9 billion to $2.5 billion. Pirro had previously vowed to continue the probe despite the judge’s ruling blocking access to certain records.

In a reversal of her position, Pirro announced that her office would close the criminal investigation and instead refer the matter to the Federal Reserve’s inspector general for review of the construction costs. She stated that the inspector general had been asked to scrutinize the building cost overruns, which the Fed attributes to unexpected developments such as the discovery of excess lead and asbestos, as well as broader inflationary pressures in construction markets.

The Federal Reserve’s inspector general has reviewed the renovation project twice and found no wrongdoing in either assessment. Pirro said she would direct her office to close the investigation as the inspector general undertakes this inquiry.

The decision clears the path for a Senate confirmation vote on Kevin Warsh, who was sworn in during his nomination hearing before the Senate Banking, Housing and Urban Affairs Committee on April 21, 2026. Warsh, a former Federal Reserve governor, has been nominated by President Donald Trump to succeed Powell as chair of the central bank.

President Trump has repeatedly criticized Powell and the Federal Reserve for not raising interest rates more aggressively, and the investigation into Powell had been viewed by some as part of a broader effort to influence central bank independence. The Justice Department’s withdrawal of the probe removes a key point of contention in the nomination process.

With the criminal investigation concluded, the Senate is expected to proceed with Warsh’s confirmation, which would mark a transition in leadership at the Federal Reserve amid ongoing discussions about monetary policy, inflation, and the institution’s operational expenditures.