Justice Department Drops Criminal Probe of Powell, Clearing Path for Warsh Fed Nomination

WASHINGTON — The Justice Department has closed its criminal investigation into Federal Reserve Chair Jerome Powell, removing a significant obstacle to the Senate confirmation of Kevin Warsh as Powell's successor, according to reports from multiple news organizations.

The decision ends an inquiry that prosecutors had struggled for months to sustain, unable to articulate a clear basis for suspecting criminal conduct, PBS NewsHour reported. The investigation was among several undertaken by the Justice Department into individuals President Donald Trump has publicly criticized.

NPR News confirmed the closure paves the way for the Senate to move forward with confirming Warsh, Trump's nominee to lead the central bank. The timing of the decision has intensified scrutiny of prosecutorial independence within the administration.

Investigation Background

The probe into Powell had failed to gain traction as career prosecutors encountered difficulty establishing grounds for criminal charges, according to PBS NewsHour. Details of what conduct the investigation examined have not been publicly disclosed by the Justice Department.

Powell, originally appointed Fed chair by Trump in 2018, became a frequent target of presidential criticism over monetary policy decisions. Trump has repeatedly called for lower interest rates and accused Powell of acting against economic growth.

Warsh Nomination Advances

Kevin Warsh, a former Fed governor who served from 2006 to 2011, was nominated by Trump to replace Powell when his term expires. The criminal investigation had created uncertainty around the confirmation timeline, with some Senate Democrats questioning whether the probe represented political interference in the independent central bank.

With the investigation closed, Senate Banking Committee hearings on Warsh's nomination are expected to proceed. Warsh is known for his hawkish stance on inflation and his advocacy for tighter monetary policy during his previous tenure at the Fed.

Questions of Prosecutorial Independence

The closure has reignited concerns about the Justice Department's independence under the Trump administration. Legal observers note the investigation was one of several targeting individuals the president has publicly opposed, raising questions about whether prosecutorial decisions align with political objectives.

The Justice Department has not issued a public statement explaining the basis for opening or closing the Powell investigation. Neither the department nor the White House responded to requests for comment on the decision's timing relative to the Warsh confirmation process.

What we know: The Justice Department has ended a criminal investigation into Fed Chair Jerome Powell that struggled to establish grounds for charges. The closure removes an obstacle to Kevin Warsh's Senate confirmation as Powell's successor. What remains unclear: The specific conduct under investigation, the reasons for opening the probe, and whether the timing of its closure was coordinated with the confirmation process.