Jeanine Ferris Pirro, United States Attorney for the District of Columbia, speaks during a press conference at the Department of Justice in Washington, DC, USA on August 12, 2025.
Annabelle Gordon Reuter
President Donald Trump has repeatedly attacked the independence of the Federal Reserve. Friday’s suspension of the Justice Department’s investigation into Federal Reserve Chairman Jerome Powell will not completely resolve the threat, but it will clear the way for the confirmation of President Trump’s chairman nominee, Kevin Warsh.
“I think it would be foolish to conclude from this that the Fed is out of the woods,” said Lev Menand, a professor at Columbia Law School.
Mr. Warsh has long promised, including during his nomination hearing Tuesday, to maintain the Fed’s independence. But it remains to be seen how he will counter a president who has said lowering interest rates is a litmus test for his candidacy. Mr. Trump does not hesitate to tell normally independent branches of the federal government what to do. The Fed remains one of the few holdouts over which he has little control.
U.S. Attorney Jeanine Pirro announced Friday that she is closing an investigation into cost overruns in the Fed’s renovation project and Powell’s testimony about it. Sen. Thom Tillis, RN.C., has refused to allow Warsh’s nomination to move forward to a vote in the full Senate pending the investigation because he sees it as a threat to the Fed’s ability to set interest rates without political considerations.
Tillis has not said whether he will stop resisting now that Pirro has retreated. Mr. Pirro said he would like to know the findings of the Fed inspector general’s investigation. “If the facts warrant, we will not hesitate to reopen the criminal investigation,” he said in a statement.
Scott Alvarez, the Fed’s former general counsel, said the prospect that Mr. Pirro might reopen the investigation could give the Fed pause. Pirro’s office told a judge in March that there was no concrete evidence of wrongdoing to support issuing the subpoena. The Fed likely wants to know what facts might cause Mr. Pirro to reopen the investigation.
“The ambiguity of Mr. Pirro’s statement suggests that Mr. Jay may be concerned about harassment by the Justice Department after he leaves the Fed,” Alvarez said. The Fed is likely trying to clarify that, he said.
The Fed declined to comment. Warsh did not respond to requests for comment.
“The White House remains confident as ever that the Senate will quickly confirm Kevin Warsh as the next Fed Chairman, ultimately restoring capacity and confidence in the Fed’s decision-making,” White House Press Secretary Khush Desai said in a statement.
President Trump appointed Powell to his current position as chairman in 2017, but the president quickly became displeased with him because he didn’t like Powell’s handling of interest rates. During his first term in the White House, Trump considered firing Powell, but took no action.
In his second administration, Trump went even further. Mr. Trump criticized Mr. Powell for not cutting interest rates more significantly, saying it would make financing U.S. debt more expensive.
The Federal Reserve is required by law to set interest rates with maximum consideration for full employment and low inflation. Inflation is soaring in countries where central banks have lost their independence, such as Türkiye.
Mr. Pirro has said he acted independently in deciding to investigate Mr. Powell, but Mr. Trump wholeheartedly supports the investigation. He said he believed “crime” was involved in the Fed’s renovation plans.
In August, President Trump announced that he would remove Governor Lisa Cook from the Federal Reserve Board for her role in mortgage fraud. She fought these claims, and the court allowed her to remain in her seat while the case was pending in the Supreme Court. Mr. Powell attended court arguments in Mr. Cook’s case in January. A decision could be made as early as Wednesday.
Even if the court allows Cook to remain in office, the president could later seek to remove Powell. President Trump recently suggested that he would consider doing so even if Warsh were confirmed as chairman. Mr. Powell can remain in a separate capacity as a director on the seven-member Federal Reserve Board until January 2028.
“We’re going to have to fire him, right? If he doesn’t get home on time,” Trump said in an April 15 interview with Fox Business.
“This is a concerted effort to give the administration control over Fed policy decisions,” Menand said. “It’s been going on for a year, and the administration has pivoted to different tactics multiple times.”
Mr. Trump is unlikely to abandon his interest in the Fed even under a new chairman. On the morning of Mr. Warsh’s Senate confirmation, the president told CNBC that Mr. Trump would be disappointed if Mr. Warsh did not cut rates quickly.
Warsh said at the hearing that no matter what Trump says, it will be his and the Fed’s decision where to set interest rates. “I don’t think monetary policy independence is threatened when elected officials express their views on interest rates,” Warsh said. “The Fed’s independence depends on the Fed.”
Trump may yet prove it.
