DOJ Prosecutors Show Up Unannounced at Fed as Probe Into Powell Stirs Political Fallout

The New York Times, NBC News, the Washington Post, CBS News, Reuters, Bloomberg, and the Wall Street Journal contributed to this report.

An already messy standoff between the Justice Department and the Federal Reserve took a stranger turn this week – with prosecutors literally showing up at the Fed’s doorstep.

Staff from US Attorney Jeannine Pirro’s office made an unannounced visit Tuesday to the Federal Reserve’s headquarters renovation site in Washington, asking for a tour and saying they wanted to “check on progress.” They didn’t get far. According to the Fed’s outside counsel, Robert Hur, the group was turned away and directed to go through legal channels instead.

The visit lands awkwardly. A federal judge has already thrown cold water on the investigation tied to the project – a yearslong, $2.5 billion overhaul of the Fed’s historic buildings – saying prosecutors had produced essentially no evidence of wrongdoing by Fed Chair Jerome Powell.

Hur didn’t mince words in his response to prosecutors. He pointed directly to the court ruling and warned against trying to sidestep it, telling Pirro’s team to stick to proper legal avenues if they want to challenge the decision.

The investigation first surfaced publicly in January, when Powell revealed the Fed had received subpoenas related to his past congressional testimony about the renovation. From the start, he framed it as something more political than legal – pressure tied to disagreements over interest rates.

That argument gained traction in March when Chief Judge James Boasberg blocked the subpoenas outright, calling them “pretextual” and noting the government had shown “zero evidence” of a crime. A follow-up attempt by prosecutors to revive the subpoenas also failed earlier this month.

Still, Pirro isn’t backing off. In a statement after the visit, she defended the move, pointing to ballooning costs on the renovation – now roughly 80% above the original budget – and questioning how that squares with the Fed’s role overseeing the economy.

What might have been a niche legal dispute is now spilling into Washington politics.

The investigation is complicating the confirmation of Kevin Warsh, President Donald Trump’s pick to replace Powell. Republican Senator Thom Tillis has made it clear he won’t support moving Warsh forward while the probe hangs over the Fed.

That effectively stalls the nomination in the Senate Banking Committee – at least for now.

Timing hasn’t helped perceptions either. The surprise visit from prosecutors came the same day lawmakers announced Warsh’s confirmation hearing date, raising eyebrows across Capitol Hill. Senate Banking Chair Tim Scott said he expects the investigation to wrap up soon, but offered no firm timeline.

Behind the scenes, the clash is feeding into a broader concern: how insulated the Fed really is from political pressure.

Powell’s term as chair is set to end in May, though he can remain on the Fed’s board through 2028. The central bank, which funds itself independently rather than through taxpayer dollars, has long guarded its autonomy – especially when it comes to interest rate decisions.

This investigation, critics argue, cuts close to that boundary.

For now, there are still no charges, no new evidence publicly presented, and a judge who has already signaled skepticism. But the optics – prosecutors showing up unannounced at the Fed, a stalled nomination, and an ongoing feud between policymakers – suggest this isn’t winding down quietly.

If anything, it’s drifting further into political territory.