An unprecedented criminal investigation into the sitting Federal Reserve chair appears to be nearing its end. According to ABC News and reported by financial account @DeItaone, the US Department of Justice (DOJ) is expected to formally drop its probe into Fed Chair Jerome Powell.
The case marked the first time in US history that a sitting Fed chair faced a criminal investigation, and political and legal drama has dominated headlines for months.
Renovation Cost Overrun: From $1.9B to $2.5B
The trigger was a dispute over construction costs. The Fed's Washington D.C. headquarters underwent a massive renovation, with the original budget of $1.9 billion ballooning to about $2.5 billion due to rising material and labor costs. Powell testified before the Senate Banking Committee in June 2025 about the overrun. Republican Representative Anna Paulina Luna then filed a criminal referral, accusing Powell of making false or misleading statements under oath.
By November 2025, Trump-appointed US Attorney for D.C. Jeanine Pirro had launched a full criminal investigation. In January 2026, the DOJ issued a grand jury subpoena to the Fed and threatened to bring criminal charges against Powell.
Pressure to Cut Rates? Judge Found 'No Evidence'
The timing of the probe was politically charged. President Trump had repeatedly blasted Powell for not cutting rates fast enough, while Powell insisted on the Fed's independence. In a rare video statement on January 11, Powell called the investigation a "pretext" designed to pressure him into resigning or cutting rates.
In March, US District Judge James Boasberg blocked the subpoena and harshly criticized the probe as "political harassment" and a "coercive tool". The judge noted that prosecutors admitted in court they had "found no evidence of a crime" but pressed ahead anyway, citing a $1.2 billion cost overrun.
The DOJ's expected dismissal effectively concedes the case lacked legal merit. The final outcome still requires formal notice, but the judge's earlier ruling had already signaled the investigation's collapse.