Prosecutor tells judge there's a lack of evidence in Fed Chair Powell inquiry on costly Fed renovations

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Jerome Powell, chairman of the US Federal Reserve, during the Federal Reserve Board open meeting in Washington, DC, US, on Thursday, March 19, 2026. In fresh projections released Wednesday, officials maintained their call for one rate cut this year,

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A federal prosecutor admitted in court that the government lacks evidence of wrongdoing by Federal Reserve Chair Jerome Powell in its investigation of his testimony before a Senate committee last year, a new report states.

The Department of Justice opened its investigation after he appeared before the Banking Committee to discuss the Fed’s $2.5 billion renovation project for its headquarters.

The backstory:

The admission came during a sealed hearing during which lawyers for the Justice Department and the Federal Reserve battled over two Grand Jury subpoenas sought by prosecutors as part of its inquiry, the Washington Post reported. 

The federal judge blocked the subpoenas a little more than a week after the March 3 hearing, with U.S. District Court Judge James Boasberg finding that the Justice Department’s justifications were "thin and unsubstantiated."

"A mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower interest rates or resigning," he wrote in his finding.

What was said during the hearing

The Associated Press reprinted the portion of the exchange below between the judge and Assistant U.S. Attorney Andrew Massucco from the transcript.

Boasberg asked if the government had evidence of fraud or misconduct by Powell during his testimony on the Federal Reserve’s renovations at its two main buildings.

Judge James Boasberg: "So what false statements did (Powell) make before Congress?"

Assistant U.S. Attorney Andrew Massucco: "Well, we don’t know is my first answer. However, there are certain areas that he addressed that caused concern."

Judge James Boasberg "Okay. And then what evidence is there of fraud or criminal misconduct in relation to the renovations?"

Assistant U.S. Attorney Andrew Massucco: "Again, we do not know at this time. However, there are 1.2 billion reasons for us to look into it."

The Washington Post, which first reported on the transcript, also released excerpts from the hearing.

Timeline:

The investigation by the U.S. Attorney for the District of Columbia began after Powell testified before the Senate Banking Committee in June 2025 about his agency’s years-long renovation of its headquarters. 

In January 2026, Powell revealed details about the inquiry and called it an attack on the Fed’s independence. 

Following the release of Boasberg’s finding earlier this month, U.S. Attorney Jeanine Pirro, who oversees the Justice Department’s Washington office, pledged to appeal the ruling.

Workers are seen at the Federal Reserve renovation site on January 14, 2026, in Washington, DC. The Federal Reserve Board is carrying out a major renovation of its two historic buildings, the Marriner S. Eccles Building and the FRB-East Building, alm

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By the numbers:

The planned renovations of the historic Marriner S. Eccles Building and the adjacent Federal Reserve East Building, both of which were built in the 1930s and have never been fully renovated, began in 2017.

Modernizing the headquarters was expected to cost $1.9 billion in 2021, and work began the next year. Since then, however, costs have climbed to $2.5 billion. 

RELATED: A rare, behind-the-scenes look at the Fed's $2.5 billion renovation that’s rankled Trump

What's next:

Powell took over as head of the Federal Reserve in 2017, after being nominated by Trump during his first term. He is scheduled to step down as chair on May 15; however, the federal investigation has disrupted that timeline.

Trump has already nominated Fed Governor Kevin Warsh to replace Powell, but Sen. Thom Tillis (R-FL) has pledged to block any nominees while the investigation is ongoing.

Powell has said that if no replacement is in place by the end of his term as chair, he would continue serving as chair pro tempore until one is confirmed. Even when his time as chair is over, Powell will remain as a Governor until the end of January 2028.