WASHINGTON, D.C. – U.S. Attorney for the District of Columbia Jeanine Pirro spent the week defending her office’s criminal investigation into Federal Reserve Chair Jerome Powell and the Fed’s headquarters renovation project.
The inquiry has rattled financial markets and sparked a fight on Capitol Hill. It focuses on reported cost overruns topping $1 billion and whether Powell misled Congress in sworn testimony.
Pirro, a former Fox News host and a long-time ally of President Donald Trump, said the case is standard oversight, not payback. She was confirmed as U.S. attorney in August 2025 after an interim appointment in May. In an appearance on Fox News’ Hannity on January 14, she said her office tried several times to contact the Federal Reserve over the winter holidays and got no response.
In a post on X late January 13, Pirro wrote that the U.S. Attorney’s Office reached out “on multiple occasions” to discuss cost overruns and Powell’s congressional testimony, then moved to legal process after being ignored.
She added that the legal process “is not a threat.” In interviews, she repeated the same point and said the situation could have been avoided if the Fed had responded to outreach.
The investigation received approval in November 2025. It escalated on January 9, when prosecutors issued grand jury subpoenas seeking documents and testimony tied to Powell’s June 2025 appearance before the Senate Banking Committee.
The renovation of the Federal Reserve’s historic headquarters buildings on the National Mall reportedly rose from about $1.9 billion to $2.5 billion, raising concerns about management decisions and the accuracy of public disclosures.
How the Investigation Started: Missed Replies and Spending Concerns
Pirro has described the probe as a basic push for accountability around taxpayer dollars. In media appearances, she stressed the scale of the overspending, saying it was not “a million” or “ten million” but “a billion dollars” in overruns. She said a gap that large can point to serious problems, including possible fraud or embezzlement, and she pressed for answers on where the money went.
People familiar with the outreach said the U.S. Attorney’s Office sent two emails during the December holidays. Those messages did not include a stated deadline or clearly signal a criminal investigation. After no reply, prosecutors quickly moved to subpoenas.
Pirro has said the steps her office took were based on the facts, and she rejected claims that the probe is tied to the Trump administration’s long-running complaints about Powell and interest rate policy.
Powell Pushes Back, Warns About Fed Independence
Powell responded on January 11 with an unusual video statement, calling the subpoenas “unprecedented” and describing them as an attempt to intimidate the central bank. He linked the investigation to pressure from the White House over monetary policy, saying the threat of criminal charges followed the Fed’s choice to set rates based on its best judgment rather than presidential preference.
Powell said he respects the rule of law and agreed with the idea that no one is above it, including the Fed chair. He also said the Federal Reserve kept Congress fully informed about the renovation project.
Capitol Hill Reaction and Wider Blowback
The investigation has drawn criticism from both parties. Republican senators on the Senate Banking Committee, including Lisa Murkowski and Thom Tillis, have condemned the probe and described it as an effort to push the Fed.
Murkowski called for a congressional review of the Department of Justice. Former Fed Chairs Alan Greenspan, Ben Bernanke, and Janet Yellen, along with other economists, issued a joint statement warning that the case could weaken the central bank’s independence.
Reports have also pointed to frustration inside the Trump administration, with some officials said to be surprised by the subpoenas and upset about a lack of coordination. President Trump has publicly distanced himself, telling NBC News he did not know about the action in advance and that his main concern remains high interest rates.
Pirro has not backed down. On Hannity, she said her office is not attacking the Fed’s independence; it is doing its job. She also pushed back on critics, including some Republicans, arguing that no public official should be treated as off limits to investigators.
What It Could Mean for the Federal Reserve and Economic Policy
The dispute highlights the strain between the executive branch and the Federal Reserve, an agency designed to operate with independence so that monetary policy remains credible. Legal experts have noted that charges such as perjury generally require strong proof that a false statement was intentional, which can be difficult to establish.
As the investigation continues, attention remains on whether the Federal Reserve cooperates in ways that prevent further escalation. Pirro has said she expects Powell’s full cooperation, and she has returned often to her central message: no one is above the law.
The story is moving quickly, with potential effects on financial markets, Fed governance, and the ongoing debate over political influence on economic policy. Lawmakers and market watchers are now waiting to see whether Congress schedules hearings or the Justice Department takes additional steps in the weeks ahead.
