In a scathing ruling, a federal judge blocked a subpoena issued by a grand jury to the Federal Reserve System as part of Chairman Jerome Powell’s criminal investigation.
U.S. Attorney for the District of Columbia Jeanine Pirro said after the verdict was unsealed Friday that the Justice Department would immediately appeal what she called the “outrageous” sentence.
Friday’s action is likely to keep Powell in the chair for longer, as Republican Sen. Thom Tillis has vowed to block Kevin Warsh from confirming Powell’s replacement until the federal investigation is concluded.
This could mean interest rates will remain higher for a longer period of time than President Trump would like, as Chairman Powell has refused to accede to the president’s demands for further rate cuts.
In his ruling, U.S. District Judge James Boasberg said there was evidence that Mr. Pirro was motivated to investigate Mr. Powell by a desire to get the Fed chief to yield to Mr. Trump and cut interest rates quickly and broadly.
Mr. Pirro’s investigation is said to focus on the multibillion-dollar renovation of the Federal Reserve’s headquarters in Washington and Mr. Powell’s testimony before the Senate Banking Committee about the project.
“Did prosecutors issue those subpoenas for a proper purpose? The court finds that they did not,” Boasberg wrote in a Washington U.S. District Court decision dated Wednesday and unsealed Friday.
“There is abundant evidence that the primary (if not the only) purpose of the subpoenas is to harass and pressure Mr. Powell into yielding to the President or resigning to make way for the Fed Chairman,” the judge wrote.
“Meanwhile, the government has presented no evidence that Mr. Powell committed any crime other than displeasing the President,” Boasberg wrote.
Pirro blasted Boasberg’s sentence at a press conference Friday, calling it “outrageous.”
“Jerome Powell is now blessed with immunity,” she raged. “This is wrong and has no legal authority.”
Tillis predicted in a post on X on Friday that the ruling would stand.
“This ruling confirms just how weak and frivolous Chairman Powell’s criminal investigation is, and is nothing short of a failed attack on the Fed’s independence,” he said. “We all know how this will end, and the DCUS Attorney’s Office should avoid further embarrassment.”
The Fed declined to comment when contacted by CNBC.
Mr. Boasberg’s ruling and the Justice Department’s planned appeal will likely keep Mr. Powell as Fed chairman until his term expires in May.
Tillis’ promise of a “no vote” to the Banking Committee moving forward with Warsh’s nomination would stall the committee and prevent Warsh from receiving a confirmation vote in the full Senate.
President Trump’s desire for further Fed rate cuts is further complicated by the Iran war.
Rising energy costs are likely to deter policymakers from easing until it becomes clearer how and when the war will end.
Federal Reserve Chairman Jerome Powell speaks during a press conference after the Federal Open Market Committee at the Federal Reserve Board in Washington, October 29, 2025.
Alex Wong | Getty Images News | Getty Images
Recent statements from Federal Reserve officials have generally indicated a cautious stance on further rate cuts, with the exception of Fed Directors Stephen Millan and Christopher Waller, who support lower rates.
The market had already postponed expectations for a rate cut until the end of the year. Before the war, the market had priced in at least two rate cuts.
— CNBC’s Eamon Javers and Jeff Cox contributed to this article
