Federal Reserve lawyers have asked the judge to uphold the previous ruling, reigniting the Powell subpoena case.
2026-03-27 14:00:21
The Federal Reserve Board recently filed court documents strongly urging the judge to uphold the previous ruling and reject prosecutors' motion to reconsider. The motion aimed to reinstate the subpoena for criminal investigation against Federal Reserve Chairman Jerome Powell, focusing on the expensive renovations to the Fed headquarters and Powell's testimony to Congress on the matter. This incident highlights the tensions between the U.S. administration and the central bank over monetary policy and institutional independence.
In court documents declassified on Thursday (March 26), Federal Reserve lawyers made it clear to Judge James Boasberg that the U.S. Attorney's Office for the District of Columbia's motion for reconsideration fell far short of the legally required threshold.
In a motion filed in the U.S. District Court for the District of Columbia in Washington, the Federal Reserve's lawyers wrote that the motion for reconsideration did not even mention, let alone meet, the stringent legal standards applicable to the specific remedy they sought. They pointed out that reconsideration is only justified if the relevant laws have changed, new evidence has emerged, or there is a need to correct a clear error or prevent a clear injustice—none of which occurred.
The lawyers further stated that the prosecutor's motion did not attempt to overcome these high hurdles, but instead turned to a distorted description of the court's opinion and the records on which it was based.
The Fed’s stance is not surprising, as the board initially strongly opposed subpoenas against the central bank, arguing that these subpoenas and related criminal investigations were merely pretexts to force Powell to cut interest rates more quickly and significantly to meet President Trump’s repeated demands.
On the day the incident occurred, President Trump, speaking to reporters at the White House, directly called Powell "a fool at the Fed." This statement is consistent with his past similar harsh criticisms of the chairman.
In her ruling, Judge Boasberg quoted extensively similar statements made by Trump in the past as evidence: "In short, the president has been asking for years whether there is anyone who can help him get rid of this troublesome Federal Reserve chairman."
In his comments, Trump also vehemently criticized the Federal Reserve building renovation project for its significant cost overruns and complained that he was sued for demolishing the East Wing of the White House to build a ballroom, while Powell seemed to escape legal responsibility. He stated that he could have completed a similar project at a much lower cost than currently estimated, but the project is now progressing slowly, and the building is even in a "see-through" state, meaning the walls have not yet been erected.
Trump added that the National Historic Trust sued him personally instead of the Federal Reserve building, a situation that "could only happen to Trump." He also mocked Powell as "too late," claiming his interest rate policies were inappropriate yet he faced no legal consequences.
Previously, Judge Boasberg had issued a strongly worded ruling dismissing two subpoenas issued by the office of U.S. Attorney Jeanine Pirro against the Federal Reserve Board of Governors. These subpoenas sought to obtain records regarding the multi-billion dollar renovation project at the central bank's headquarters, as well as brief discussions of the project during Powell's testimony before a Senate committee.
The judge agreed with the Federal Reserve Board's argument that the subpoenas were issued for improper purposes. He wrote, "There is substantial evidence that the primary (if not the sole) purpose of these subpoenas was to harass and pressure Powell to either yield to the president or resign to make way for a Federal Reserve chairman who is willing to do so."
In an earlier sealed-room hearing, Judge Boasberg directly questioned the prosecutor about evidence of fraud or criminal misconduct in the renovation project. Prosecutor GA Massucco-LaTaif replied, "We don't know at the moment." However, he added that the project had incurred a cost overrun of approximately $1.2 billion, justifying an investigation, and stated that such a massive overrun "seems suspicious," equivalent to the GDP of some smaller countries, and cannot be simply ignored on the grounds of historic buildings.
In his written ruling, Judge Boasberg argued that the prosecutor's defense of the subpoena's purpose was a "laborious claim of a legitimate purpose." He pointed out that the fact that construction projects frequently exceeded budgets was by no means indicative of a crime, nor was there any reason to believe that the project was particularly prone to fraud. The Federal Reserve's independent inspector general had fully accessed information about the project and conducted an audit, raising no concerns about fraud.
In its motion for reconsideration on March 12, Piro's office argued that Judge Boasberg's ruling applied the wrong legal standards, contained errors in certain important facts, and ignored other relevant facts.
It remains unclear when the judge will make a final ruling on these opposing motions, or whether the prosecutor's office will drop its investigation into Powell if the motion for reconsideration is dismissed.
North Carolina Republican Senator Thom Tillis has indicated he will block the confirmation process for Kevin Warsh to succeed Jerome Powell as Federal Reserve Chairman until the investigation is complete.
In such cases, it is extremely rare for a judge to overturn his own ruling or for an appellate court to overturn such a decision.
This series of court battles reflects the ongoing disagreement between the Trump administration and the Federal Reserve on interest rate policy, and the challenge to the central bank's independence.
The Federal Reserve Board emphasized that the investigation lacked substantial evidence of a crime, while prosecutors maintained that the cost overrun warranted a thorough investigation. Regardless of the final outcome, this incident is likely to further intensify financial markets' concerns about the stability of monetary policy and institutional autonomy.
As the motions are heard, the market and the public will continue to watch Judge Boasberg's next ruling and the evolution of tensions between the Trump administration and the Federal Reserve.
Federal Reserve lawyers strongly refuted the prosecutor's motion.
In court documents declassified on Thursday (March 26), Federal Reserve lawyers made it clear to Judge James Boasberg that the U.S. Attorney's Office for the District of Columbia's motion for reconsideration fell far short of the legally required threshold.
In a motion filed in the U.S. District Court for the District of Columbia in Washington, the Federal Reserve's lawyers wrote that the motion for reconsideration did not even mention, let alone meet, the stringent legal standards applicable to the specific remedy they sought. They pointed out that reconsideration is only justified if the relevant laws have changed, new evidence has emerged, or there is a need to correct a clear error or prevent a clear injustice—none of which occurred.
The lawyers further stated that the prosecutor's motion did not attempt to overcome these high hurdles, but instead turned to a distorted description of the court's opinion and the records on which it was based.
The Fed’s stance is not surprising, as the board initially strongly opposed subpoenas against the central bank, arguing that these subpoenas and related criminal investigations were merely pretexts to force Powell to cut interest rates more quickly and significantly to meet President Trump’s repeated demands.
Trump publicly and fiercely criticizes Powell
On the day the incident occurred, President Trump, speaking to reporters at the White House, directly called Powell "a fool at the Fed." This statement is consistent with his past similar harsh criticisms of the chairman.
In her ruling, Judge Boasberg quoted extensively similar statements made by Trump in the past as evidence: "In short, the president has been asking for years whether there is anyone who can help him get rid of this troublesome Federal Reserve chairman."
In his comments, Trump also vehemently criticized the Federal Reserve building renovation project for its significant cost overruns and complained that he was sued for demolishing the East Wing of the White House to build a ballroom, while Powell seemed to escape legal responsibility. He stated that he could have completed a similar project at a much lower cost than currently estimated, but the project is now progressing slowly, and the building is even in a "see-through" state, meaning the walls have not yet been erected.
Trump added that the National Historic Trust sued him personally instead of the Federal Reserve building, a situation that "could only happen to Trump." He also mocked Powell as "too late," claiming his interest rate policies were inappropriate yet he faced no legal consequences.
The judge's previous ruling was based on the fact that the purpose of the subpoena was improper.
Previously, Judge Boasberg had issued a strongly worded ruling dismissing two subpoenas issued by the office of U.S. Attorney Jeanine Pirro against the Federal Reserve Board of Governors. These subpoenas sought to obtain records regarding the multi-billion dollar renovation project at the central bank's headquarters, as well as brief discussions of the project during Powell's testimony before a Senate committee.
The judge agreed with the Federal Reserve Board's argument that the subpoenas were issued for improper purposes. He wrote, "There is substantial evidence that the primary (if not the sole) purpose of these subpoenas was to harass and pressure Powell to either yield to the president or resign to make way for a Federal Reserve chairman who is willing to do so."
In an earlier sealed-room hearing, Judge Boasberg directly questioned the prosecutor about evidence of fraud or criminal misconduct in the renovation project. Prosecutor GA Massucco-LaTaif replied, "We don't know at the moment." However, he added that the project had incurred a cost overrun of approximately $1.2 billion, justifying an investigation, and stated that such a massive overrun "seems suspicious," equivalent to the GDP of some smaller countries, and cannot be simply ignored on the grounds of historic buildings.
In his written ruling, Judge Boasberg argued that the prosecutor's defense of the subpoena's purpose was a "laborious claim of a legitimate purpose." He pointed out that the fact that construction projects frequently exceeded budgets was by no means indicative of a crime, nor was there any reason to believe that the project was particularly prone to fraud. The Federal Reserve's independent inspector general had fully accessed information about the project and conducted an audit, raising no concerns about fraud.
Prosecutor's motion and external reactions
In its motion for reconsideration on March 12, Piro's office argued that Judge Boasberg's ruling applied the wrong legal standards, contained errors in certain important facts, and ignored other relevant facts.
It remains unclear when the judge will make a final ruling on these opposing motions, or whether the prosecutor's office will drop its investigation into Powell if the motion for reconsideration is dismissed.
North Carolina Republican Senator Thom Tillis has indicated he will block the confirmation process for Kevin Warsh to succeed Jerome Powell as Federal Reserve Chairman until the investigation is complete.
In such cases, it is extremely rare for a judge to overturn his own ruling or for an appellate court to overturn such a decision.
Overall impact and outlook of the event
This series of court battles reflects the ongoing disagreement between the Trump administration and the Federal Reserve on interest rate policy, and the challenge to the central bank's independence.
The Federal Reserve Board emphasized that the investigation lacked substantial evidence of a crime, while prosecutors maintained that the cost overrun warranted a thorough investigation. Regardless of the final outcome, this incident is likely to further intensify financial markets' concerns about the stability of monetary policy and institutional autonomy.
As the motions are heard, the market and the public will continue to watch Judge Boasberg's next ruling and the evolution of tensions between the Trump administration and the Federal Reserve.
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