Powell says he will stay at Fed until probe ends

Jerome Powell said he had “no intention” of leaving the Federal Reserve Board of Governors until a Justice Department probe into his testimony and the central bank’s headquarters renovation was “well and truly over with transparency and finality.” The decision put an institutional spotlight on the Fed’s independence at a moment when its leadership, its building project and its political exposure were all under scrutiny.

The probe centered on cost overruns in the multiyear renovation of the Marriner S. Eccles Building and the 1951 Constitution Avenue Building in Washington, D.C., a project that became a political flashpoint for President Donald Trump and his allies. The renovation was originally estimated at about $1.9 billion in 2023 and later projected to reach about $2.5 billion by 2025, with the extra costs tied to asbestos removal, lead contamination and structural repairs in the historic buildings.

Powell’s remarks came as the Fed held interest rates steady at what was expected to be his final policy meeting and press conference as chair. That timing gave the episode added weight: the question was no longer only how the Fed would steer monetary policy, but how its succession would be handled under the glare of a federal criminal inquiry.

The Justice Department later dropped the criminal probe and referred the matter to the Fed’s Office of Inspector General, a move that removed a major obstacle to Senate consideration of Kevin Warsh, Trump’s nominee to succeed Powell. Senate Banking Committee Republicans, including Sen. Thom Tillis of North Carolina, had indicated that the probe would matter in deciding whether to back Warsh, and court filings suggested prosecutors had little evidence that Powell committed a crime.

The Fed’s inspector general had already been reviewing the renovation since July 2025, according to Michael Horowitz’s office, which said it was examining the project’s “substantial cost increases and overruns.” A federal judge, James Boasberg, had previously blocked subpoenas tied to the case after finding little evidence that Powell had committed a crime.

With the criminal case dropped, the immediate legal threat eased, but the broader institutional damage was already done. The episode left the Fed defending not just its construction budget but the credibility of its leadership transition, at a time when any perception of political pressure on the central bank can ripple through markets and raise fresh doubts about how securely monetary policy is being set.