The US Justice Department is closing its investigation into Federal Reserve Chairman Jerome Powell, a move seen as removing a hurdle to the confirmation of President Donald Trump’s nominee Kevin Wersh to lead the central bank, with Powell’s term as chairman set to end on May 15.US Attorney Jeanine Pirro said the criminal investigation into cost overruns related to renovations at the Federal Reserve’s Washington headquarters will be closed, with the investigation now continuing through the Office of Inspector General (OIG), which is already reviewing the project, Reuters reports.“I have directed my office to close our investigation as the (Office of Inspector General) conducts this investigation,” Pirro said in a social media post. She also said she could reopen a criminal investigation “should the facts require doing so.”The move also comes amid Trump’s long-running clash with Powell over interest rates and broader concerns over the independence of the Federal Reserve.The investigation was examining the Fed’s $2.46 billion headquarters renovation project, including cost overruns, and statements Powell made in Congress last year.Reuters reported that the current budget is about $1.1 billion more than the 2020 allocation, with the increase mainly due to rising labor and material costs.According to The Guardian, the investigation was first made public in January when Powell revealed in a video that he had been subpoenaed by the Justice Department and said the investigation was being used to pressure the Fed on monetary policy.It suffered a major setback last month when Chief U.S. District Judge James Boasberg blocked subpoenas issued to the Fed’s Board of Governors, saying prosecutors had shown “essentially zero evidence” Powell committed a crime and finding the subpoenas were issued for an improper purpose.The investigation also blocked Wersh’s confirmation, with Republican Senator Thom Tillis saying he would not support the nomination as long as the investigation remained active. During Warsh’s confirmation hearing, Tillis said, “Let’s get rid of the investigation so I can support your nomination.”Trump defended Powell’s investigation last week, saying, “Whether it’s incompetence, corruption or both, I think you’ve got to find out”.Powell said he had no intention of leaving the Federal Reserve Board until the matter was resolved “transparently and finally.”Pirro said the Fed’s internal watchdog will continue to investigate the matter and Senate Banking Committee Chairman Tim Scott has asked for a briefing within 90 days.The US Supreme Court is expected to rule by June on whether Trump’s removal of Federal Reserve Governor Lisa Cook was constitutional, putting broader questions about the central bank’s independence under scrutiny.
