Powell probe shifts to Fed inspector general

U.S. Attorney Jeanine Pirro has signaled that the future of her criminal investigation into Federal Reserve Chair Jerome Powell now depends on the findings of the Federal Reserve’s Office of Inspector General. Pirro has said that whatever emerges from the inspector general’s review of cost overruns in the central bank’s renovations will dictate whether her office takes further steps.

The Department of Justice has already transferred its criminal investigation of Powell to the Fed inspector general. According to the assurances described, the probe will not be reopened by federal prosecutors unless the inspector general makes a criminal referral or new evidence comes to light through that internal review.

On May 3, 2026, Pirro announced a change in her legal approach after a court ruling quashed subpoenas issued in connection with the Powell investigation. Rather than pursuing an appeal of that decision, she said she would file a motion to vacate the order that invalidated her subpoenas.

By moving away from an appeal and toward a motion to vacate, Pirro is focusing on trying to undo the specific order curbing her investigative tools, while still aligning the broader future of the case with the outcome of the inspector general’s inquiry.

At the center of the inspector general’s role are questions surrounding cost overruns linked to renovations at the Federal Reserve. The results of this internal review are expected to guide whether any further criminal investigative steps related to Powell are considered.

With the Department of Justice now deferring to the inspector general on fact finding, the renovation issue serves as the main factual basis on which any renewed prosecutorial action would rely. Without a criminal referral, the prior federal probe is not expected to resume.

Jerome Powell has stated he will remain on the Federal Reserve Board after his term as chair concludes on May 15, 2026. He cited ongoing legal threats as a factor in his decision to stay on the board rather than departing when his leadership term ends.

Powell’s decision comes as the investigation and the inspector general’s review unfold in a charged political environment. Former President Donald Trump and some of his allies have expressed dissatisfaction with Powell’s continued presence at the Federal Reserve, adding political pressure to the legal scrutiny.

With the criminal investigation now effectively in the hands of the Fed’s internal watchdog and Powell committed to remaining on the board, the next steps in the matter hinge on whether the inspector general identifies issues warranting a criminal referral.