A decision by U.S. District Attorney Jeanine Pirro to drop a criminal probe into the Federal Reserve potentially clears a path for President Donald Trump’s nominee to take over the central bank. What it won’t do is secure the current Fed chair’s departure.
Jerome Powell has pledged to remain at the U.S. central bank until the Department of Justice probe, related to cost overruns in a building renovation, is completed “with transparency and finality.” It’s not clear that Pirro’s move, which defers the investigation to the Fed’s own Office of Inspector General, will meet that test. When announcing the decision Friday, Pirro also said she would “not hesitate to restart a criminal investigation should the facts warrant doing so.”
That suggests continued pressure from the Trump administration that could motivate Powell to stay at the Fed even if the president’s nominee to replace him, Kevin Warsh, is confirmed by the Senate. While Powell’s term as chair ends on May 15, his seat on the Board of Governors doesn’t expire until 2028.
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