The Justice Department's investigation has reached a deadlock, and Walsh's nomination has been blocked! Did they intend to oust Powell, but instead made him even more secure in his position?
2026-04-09 12:28:53
Federal Reserve Chairman Jerome Powell is facing ongoing legal and political pressure from the Trump administration.
This investigation into the cost overruns of the Federal Reserve building renovation project has become a major focus of attention in the current US political arena, not only testing the independence of the Federal Reserve, but also directly affecting the future direction of monetary policy and the stability of the Federal Reserve leadership.
Back in January, Powell publicly stated that his office had received subpoenas from Prosecutor Piro's office. He explicitly pointed out that these subpoenas were essentially punishment for his refusal to comply with Trump's pressure to significantly lower interest rates.
Later legal proceedings revealed that the subpoenas primarily concerned the significant cost overruns of the Federal Reserve building renovation project and related testimony. Trump publicly claimed that "criminal activity" was involved, but provided no concrete evidence to support this allegation.
Federal Reserve lawyers quickly filed a petition with Chief Judge James Boasberg of the District of Columbia District Court for the District of Columbia to dismiss the subpoenas. Judge Boasberg ultimately granted the request, stating that prosecutors had failed to provide any meaningful evidence of wrongdoing by Powell or the Federal Reserve.
On April 3, Bosberg again rejected the prosecutor's request to reconsider the decision, bringing the investigation to a standstill.
Meanwhile, North Carolina Republican Senator Thom Tillis, who is set to retire in early 2027, has made it clear that he will block Kevin Warsh's nomination process for Federal Reserve Chairman until the investigation into Powell is fully concluded.
Jerome Powell's term as Federal Reserve Chairman will end on May 15, but he expects the Federal Reserve Board of Governors to allow him to continue serving as interim chairman until a new nominee is formally confirmed. Powell himself can also remain in office as a voting member of the Board of Governors until January 2028.
Powell told reporters on March 18, "I have no intention of leaving the council until the investigation is fully concluded, transparent, and has a final outcome."
Tillis and Senate Republicans generally support Warsh's nomination. Therefore, if Piro's investigation concludes quickly, Warsh could be confirmed rapidly and push for interest rate cuts; however, if the investigation drags on, Powell could maintain his leadership for an extended period.
Prosecutor Piro has not yet appealed the court's decision to dismiss the subpoena, and it is unclear whether or when she will take such action.
Several legal experts point out that appeals face significant difficulties. Daniel Richman, a law professor at Columbia University and former chief appeals attorney for the U.S. District Court for the Southern District of New York, stated that appeals courts typically prefer not to intervene in such cases before trial, favoring a clear ruling with substantial consequences.
Furthermore, Vanderbilt University law professor Jeffrey Bellin points out that the investigation has clear political motives. Like Judge Bosberg, other judges may also question the government's true intentions in investigating the Federal Reserve. He emphasizes that the Justice Department has long strived to maintain independence and nonpartisanship, and once public trust is lost, it is very difficult to regain, significantly reducing the likelihood of success in various cases.
Next week will be a crucial test for this case. The Senate Banking Committee is scheduled to hold a confirmation hearing for Kevin Warsh on April 16.
The Trump administration is effectively pressuring Tillis to demonstrate his commitment to principles, and a spokesperson for Tillis said Wednesday that his plans remain unchanged.
Overall , the power struggle between the Trump administration and Federal Reserve Chairman Jerome Powell has extended beyond monetary policy disagreements to legal and personnel matters. The ongoing uncertainty surrounding the investigation not only affects Powell's future but also directly impacts Kevin Warsh's nomination prospects. If the investigation cannot be resolved quickly, the Fed leadership may maintain the status quo for an extended period, adding further uncertainty to the future direction of US monetary policy.
The entire incident has once again highlighted the severe challenges facing the Federal Reserve's independence in the current political environment, and international markets and people from all walks of life are closely watching the subsequent developments.
This investigation into the cost overruns of the Federal Reserve building renovation project has become a major focus of attention in the current US political arena, not only testing the independence of the Federal Reserve, but also directly affecting the future direction of monetary policy and the stability of the Federal Reserve leadership.
Origin of the investigation: Trump accuses Powell of refusing to cut interest rates
Back in January, Powell publicly stated that his office had received subpoenas from Prosecutor Piro's office. He explicitly pointed out that these subpoenas were essentially punishment for his refusal to comply with Trump's pressure to significantly lower interest rates.
Later legal proceedings revealed that the subpoenas primarily concerned the significant cost overruns of the Federal Reserve building renovation project and related testimony. Trump publicly claimed that "criminal activity" was involved, but provided no concrete evidence to support this allegation.
Court ruling: Subpoena withdrawn, investigation stalled
Federal Reserve lawyers quickly filed a petition with Chief Judge James Boasberg of the District of Columbia District Court for the District of Columbia to dismiss the subpoenas. Judge Boasberg ultimately granted the request, stating that prosecutors had failed to provide any meaningful evidence of wrongdoing by Powell or the Federal Reserve.
On April 3, Bosberg again rejected the prosecutor's request to reconsider the decision, bringing the investigation to a standstill.
Senate obstruction: Tillis's tough stance delays Walsh's nomination
Meanwhile, North Carolina Republican Senator Thom Tillis, who is set to retire in early 2027, has made it clear that he will block Kevin Warsh's nomination process for Federal Reserve Chairman until the investigation into Powell is fully concluded.
Jerome Powell's term as Federal Reserve Chairman will end on May 15, but he expects the Federal Reserve Board of Governors to allow him to continue serving as interim chairman until a new nominee is formally confirmed. Powell himself can also remain in office as a voting member of the Board of Governors until January 2028.
Powell told reporters on March 18, "I have no intention of leaving the council until the investigation is fully concluded, transparent, and has a final outcome."
Tillis and Senate Republicans generally support Warsh's nomination. Therefore, if Piro's investigation concludes quickly, Warsh could be confirmed rapidly and push for interest rate cuts; however, if the investigation drags on, Powell could maintain his leadership for an extended period.
Appeal Prospects: Numerous Legal Obstacles, Political Motives Questioned
Prosecutor Piro has not yet appealed the court's decision to dismiss the subpoena, and it is unclear whether or when she will take such action.
Several legal experts point out that appeals face significant difficulties. Daniel Richman, a law professor at Columbia University and former chief appeals attorney for the U.S. District Court for the Southern District of New York, stated that appeals courts typically prefer not to intervene in such cases before trial, favoring a clear ruling with substantial consequences.
Furthermore, Vanderbilt University law professor Jeffrey Bellin points out that the investigation has clear political motives. Like Judge Bosberg, other judges may also question the government's true intentions in investigating the Federal Reserve. He emphasizes that the Justice Department has long strived to maintain independence and nonpartisanship, and once public trust is lost, it is very difficult to regain, significantly reducing the likelihood of success in various cases.
Future Direction: Confirmation of Hearing as a Key Milestone
Next week will be a crucial test for this case. The Senate Banking Committee is scheduled to hold a confirmation hearing for Kevin Warsh on April 16.
The Trump administration is effectively pressuring Tillis to demonstrate his commitment to principles, and a spokesperson for Tillis said Wednesday that his plans remain unchanged.
Overall , the power struggle between the Trump administration and Federal Reserve Chairman Jerome Powell has extended beyond monetary policy disagreements to legal and personnel matters. The ongoing uncertainty surrounding the investigation not only affects Powell's future but also directly impacts Kevin Warsh's nomination prospects. If the investigation cannot be resolved quickly, the Fed leadership may maintain the status quo for an extended period, adding further uncertainty to the future direction of US monetary policy.
The entire incident has once again highlighted the severe challenges facing the Federal Reserve's independence in the current political environment, and international markets and people from all walks of life are closely watching the subsequent developments.
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