In November 2025, federal prosecutors in Washington, D.C., opened a criminal investigation into Jerome H. Powell, the Chair of the Federal Reserve, concerning the renovation of the Federal Reserve’s headquarters and whether Powell made false or misleading statements to Congress about the scope and cost of the project. The inquiry, approved by U.S. Attorney Jeanine Pirro, involves a review of Powell’s congressional testimony and an examination of internal spending and planning records related to the renovation.
The investigation marks a significant escalation in the long-running conflict between President Donald Trump and Powell, whom Trump has repeatedly criticized for resisting pressure to sharply cut interest rates. Trump has publicly accused Powell of “incompetence,” threatened to remove him from office, and raised the prospect of legal action tied to the renovation project. As of April 2026, Powell has not been charged with any crime. The Department of Justice dropped the investigation on April 24, 2026.
Background Powell was nominated to the Federal Reserve Board of Governors by President Barack Obama in 2011 and was elevated to the position of Chair by President Trump in 2018. He was later reappointed to a second term as chair by President Joe Biden. Powell’s term as chair is scheduled to end in May 2026, though his term as a governor runs through January 2028.
The Federal Reserve is an independent central bank whose authority to set monetary policy is insulated by statute from direct presidential control. Presidents may remove members of the Board of Governors only “for cause,” a standard historically interpreted to require malfeasance or serious dereliction of duty.
Tensions between Trump and Powell intensified as Trump repeatedly demanded large interest-rate cuts and accused the Fed of undermining economic growth, while Powell defended the central bank’s decisions as necessary to control inflation and preserve long-term economic stability.
Fed buildings renovation
The renovation project at the center of the investigation involves the modernization of the Eccles Building and the Federal Reserve Board East Building in the District of Columbia. The buildings, constructed in the 1930s, had not undergone a comprehensive renovation in decades. The renovations were approved by the Federal Reserve Board in 2017 and have been subject to annual reviews by the board. Ownership of the East Building was transferred to the Federal Reserve in 2018 by the first Trump administration to allow for the then-vacant building to be renovated and used by the Federal Reserve to reduce its need to lease office space for its staff. The Federal Reserve's inspector general has received monthly reports on the projects and is currently conducting a second review of them at Powell's request after conducting a previous review in 2021. Construction began in 2022 and is scheduled for completion in 2027.
The total projected cost of the renovations have grown to approximately $2.5 billion, and the cost overruns led the Federal Reserve to cancel the renovation of a third building. Federal Reserve officials have cited rising labor and materials costs due to the 2021–2023 inflation surge, 2021–2023 global supply chain crisis, and the second Trump administration's tariffs as contributing to the cost overruns. Also, to bring the buildings up to the District of Columbia's current building code, the buildings required new plumbing, new electrical, HVAC, water, and fire suppression systems, new accessibility features for the disabled (including in one elevator), and the renovation has found higher levels of asbestos and a higher water table than was expected while also finding lead contamination in the ground underneath the buildings (which was not anticipated). Powell and the Federal Reserve have denied that the building designs included dining rooms or elevators for use only by VIPs or Federal Reserve Governors, rooftop terraces, and have asserted that the only proposed water features that had been included in the initial renovation plan for the East Building were eliminated.
Additionally, both the East Building and the Eccles Building are included in the District of Columbia Inventory of Historic Sites while the East Building is also included in the National Register of Historic Places, and some of the cost overruns are due to changes to the design plans to comply with historic preservation laws for maintaining historic buildings and their appearance. The Eccles Building and East Building are also located on the National Mall, and the District's building code has a height restriction that requires that buildings not be taller than the United States Capitol, which required underground construction to expand one of the buildings to include a basement and an addition to the other for greater office space. Due to their location and the historic preservation requirements, the renovations required consultation with the National Capital Planning Commission, the United States Commission of Fine Arts, the District of Columbia Public Space Committee, the District of Columbia Historic Preservation Office, and the National Park Service.
Interest rates conflict
The investigation unfolded amid broader efforts by the Trump administration to challenge Federal Reserve leadership. In May 2026, Kevin Warsh was sworn in as Powell's successor, although Powell will remain on the Fed until 2028.
Trump has also sought to remove other Federal Reserve officials, including Governor Lisa D. Cook, prompting legal challenges over the scope of presidential authority to dismiss Fed governors. The U.S. Supreme Court heard oral arguments in Trump v. Cook on January 21 to determine whether Trump has the legal authority to remove Cook over mortgage fraud allegations.
Powell stated that the subpoena threat raised fundamental questions about whether the Federal Reserve would be able to continue setting monetary policy based on economic evidence rather than political pressure or intimidation.
Investigation
In January 2026, Powell stated that the Department of Justice had served the Federal Reserve with grand jury subpoenas threatening a criminal indictment related to his congressional testimony about the renovation project. According to Powell, the subpoenas were issued on January 10, 2026. As of January 28, the Federal Reserve had reportedly not yet complied with the subpoenas; Powell declined to comment on the investigation at a press conference announcing the Federal Open Market Committee's interest rate decision that month.
The investigation reportedly began in November 2025, and unnamed sources have said that Jeanine Pirro's office issued the subpoenas without contacting the White House, Attorney General Pam Bondi, or Deputy Attorney General Todd Blanche. Pirro has defended the investigation by asserting that the subpoenas were issued because the Federal Reserve did not respond to her office's requests to discuss the cost overruns of the renovation projects, asserting: "This office makes decisions based on the merits, nothing more and nothing less." A Justice Department spokesperson contacted about the investigation stated in a press release that Bondi "has instructed her U.S. Attorneys to prioritize investigating any abuse of taxpayer dollars", while Pirro stated in an interview: "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". However, the Federal Reserve does not receive a congressional appropriation as its budget (including for its building renovations) is instead entirely funded through its open market operations, by interest payments received from banks on loans procured through the Federal Reserve's discount window, and from other fees the Federal Reserve charges banks for other services (including check processing).
Powell characterized the investigation as a pretext aimed at pressuring the Federal Reserve to lower interest rates, rather than a legitimate inquiry into his testimony or the renovation itself. He stated that the Fed had made extensive efforts to keep Congress informed through testimony and public disclosures.
According to reporting, prosecutors reviewed Powell’s public statements and requested documentation from Federal Reserve staff related to the renovation. As of mid-January 2026, it remained unclear whether prosecutors had convened a grand jury beyond issuing subpoenas or whether formal charges would be sought.
In March 2026, Judge James Boasberg ruled to quash Pirro's subpoenas, writing "the government has offered no evidence whatsoever that Powell committed any crime other than displeasing the president.” In a news conference, Pirro said she would appeal the order.
In April 2026, amid pressure from Republican Senators, Pirro announced that the investigation had been closed.
Amid renewed criticism from the Trump administration, Attorney General Todd Blanche affirmed the Department of Justice would not be reopening a criminal investigation into Powell.
Congressional testimony In June 2025, Powell testified before Congress regarding the renovation project. Under questioning, he denied that the current plans included luxury features such as VIP dining rooms, special elevators, or new marble installations, stating that existing marble was being reused where possible and that certain earlier proposals had been eliminated as plans evolved.
Following the hearing, the Federal Reserve published a “Frequently Asked Questions” document and released additional materials, including photographs and annotated planning documents, reaffirming Powell’s testimony and explaining changes to the project over time.
Critics argued that Powell’s testimony conflicted with earlier planning documents, raising questions about whether his statements were misleading. Powell has maintained that his answers accurately reflected the project as it existed at the time of his testimony.
In July 2025, U.S. Representative Anna Paulina Luna of Florida made a criminal referral to the Justice Department over Powell's testimony to the Senate Banking Committee the previous month.
Response Central bankers In a joint public statement released the day after Powell announced the subpoenas and investigation, former Federal Reserve Chairs Alan Greenspan, Ben Bernanke, and Janet Yellen, former U.S. Secretaries of the Treasury Henry Paulson, Timothy Geithner, Robert Rubin, and Jacob Lew, economists Glenn Hubbard, Kenneth Rogoff, and Jared Bernstein with others in defense of Powell that argued that the investigation was "an unprecedented attempt to use prosecutorial attacks to undermine [the Federal Reserve's] independence", and that "This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly". In an interview with CNBC, Yellen further condemned the investigation and stated that Trump's demands for the Federal Reserve to cut its interest rates to lower interest payments on the national debt "is the road to a banana republic."