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Powell Probe Deepens as the Fed Moves to Block Subpoenas

Yusuf IslamFebruary 27, 2026Last Updated: February 27, 2026

4 minutes read

The Fed is seeking to block sealed subpoenas tied to Powell's renovation testimony. Jeanine Pirro's inquiry has sharpened pressure on Powell and the Fed leadership. The dispute now risks delaying Kevin Warsh's nomination in the Senate process. The Federal Reserve has launched a sealed legal effort to block two subpoenas issued in U.S. Attorney Jeanine Pirro’s criminal investigation into Chair Jerome Powell. According to The Wall Street Journal, the Fed asked a judge to quash the demands as prosecutors examine whether Powell gave false testimony to Congress about a $2.5 billion renovation project. The dispute unfolds before a grand jury and remains largely out of public view due to secrecy rules governing criminal cases. Pirro, a longtime ally of President Donald Trump, opened the probe in November. The investigation focuses on answers Powell gave during a Senate hearing last summer about cost overruns tied to renovations of two historic Federal Reserve buildings. The Justice Department sent the subpoenas to the Fed on Jan. 9, one day after Pirro attended a White House event where Trump criticized U.S. attorneys for not prosecuting his preferred targets quickly enough. The subpoenas requested a response toward the end of January. Sealed Legal Fight Over Subpoenas The WSJ reported that the Federal Reserve is challenging the subpoenas in sealed proceedings. Its specific legal arguments remain undisclosed. Courts often allow subpoena recipients to contest requests they consider overly broad or protected by privilege. Because the matter sits before a grand jury, secrecy rules limit public access to filings and arguments. As a result, details about the Fed’s position remain unknown. Pirro has defended the inquiry. She said her office issued the subpoenas after it failed to receive answers to multiple information requests. In December, a lawyer from her office sent two emails to the Fed seeking a meeting about the renovation project. Meanwhile, Powell addressed the investigation directly. In a Jan. 11 video statement, he said the probe served as a pretext in Trump’s campaign to pressure the central bank to lower interest rates and weaken its independence. Renovation Testimony and Political Tensions The investigation centers on a brief exchange at a Senate hearing last summer. Lawmakers questioned Powell about renovation costs for two historic Fed buildings. White House officials later suggested that Powell either made false statements about costs or that the Fed failed to update building records. The dispute eased after Trump toured the project with Powell in July. During Senate testimony, Powell rejected claims that the renovations were lavish. He called certain descriptions “misleading and inaccurate.” He said the project included no new marble beyond necessary replacements, no special elevators, and no rooftop gardens or new water features. At the same time, Trump has pressed the Federal Reserve to cut interest rates to spur growth and lower borrowing costs. The Fed has taken a cautious approach, citing inflation risks. Trump has publicly criticized Powell, calling him a “moron,” a “stubborn mule,” a “Trump Hater,” and “Mr. Too Late.” Against this backdrop, one question remains: will the legal clash reshape the balance between political pressure and central bank independence? Related: Powell at The Supreme Court Tests Federal Reserve Independence Confirmation Standoff and Senate Resistance The investigation has also complicated the Senate confirmation process for Kevin Warsh, the former Fed governor whom Trump selected to succeed Powell when his term ends in May. Republicans have sought a resolution to the standoff. The dispute threatens to delay Warsh’s confirmation. Treasury Secretary Scott Bessent addressed the matter on CNBC, saying, “There were subpoenas issued. But that doesn’t have to mean that there are charges.” Earlier in January, Bessent told CBS, “I think that the message is that independence does not mean no accountability.” Sen. Thom Tillis, a Republican from North Carolina, has said he will not advance any Fed nomination, including Warsh’s, until the Justice Department concludes its probe. All Democrats on the Senate Banking Committee have taken the same position. As a result, the committee’s 13-11 Republican majority cannot move a nominee forward without Tillis. Tillis has warned that steps taken outside traditional channels could erode investor confidence in the Federal Reserve’s ability to set interest rates without political interference. Trump has signaled that Pirro intends to pursue the investigation fully. On Feb. 2, he told reporters at the White House that Pirro “is going to take it to the end and see.” During that appearance, he described the renovation cost as $4 billion, exceeding the $2.5 billion figure previously cited.

The Fed is seeking to block sealed subpoenas tied to Powell’s renovation testimony.
Jeanine Pirro’s inquiry has sharpened pressure on Powell and the Fed leadership.
The dispute now risks delaying Kevin Warsh’s nomination in the Senate process.

The Federal Reserve has launched a sealed legal effort to block two subpoenas issued in U.S. Attorney Jeanine Pirro’s criminal investigation into Chair Jerome Powell. According to The Wall Street Journal, the Fed asked a judge to quash the demands as prosecutors examine whether Powell gave false testimony to Congress about a $2.5 billion renovation project. The dispute unfolds before a grand jury and remains largely out of public view due to secrecy rules governing criminal cases.

Pirro, a longtime ally of President Donald Trump, opened the probe in November. The investigation focuses on answers Powell gave during a Senate hearing last summer about cost overruns tied to renovations of two historic Federal Reserve buildings.

The Justice Department sent the subpoenas to the Fed on Jan. 9, one day after Pirro attended a White House event where Trump criticized U.S. attorneys for not prosecuting his preferred targets quickly enough. The subpoenas requested a response toward the end of January.

Sealed Legal Fight Over Subpoenas

The WSJ reported that the Federal Reserve is challenging the subpoenas in sealed proceedings. Its specific legal arguments remain undisclosed. Courts often allow subpoena recipients to contest requests they consider overly broad or protected by privilege.

Because the matter sits before a grand jury, secrecy rules limit public access to filings and arguments. As a result, details about the Fed’s position remain unknown.

Pirro has defended the inquiry. She said her office issued the subpoenas after it failed to receive answers to multiple information requests. In December, a lawyer from her office sent two emails to the Fed seeking a meeting about the renovation project.

Meanwhile, Powell addressed the investigation directly. In a Jan. 11 video statement, he said the probe served as a pretext in Trump’s campaign to pressure the central bank to lower interest rates and weaken its independence.

Renovation Testimony and Political Tensions

The investigation centers on a brief exchange at a Senate hearing last summer. Lawmakers questioned Powell about renovation costs for two historic Fed buildings.

White House officials later suggested that Powell either made false statements about costs or that the Fed failed to update building records. The dispute eased after Trump toured the project with Powell in July.

During Senate testimony, Powell rejected claims that the renovations were lavish. He called certain descriptions “misleading and inaccurate.” He said the project included no new marble beyond necessary replacements, no special elevators, and no rooftop gardens or new water features.

At the same time, Trump has pressed the Federal Reserve to cut interest rates to spur growth and lower borrowing costs. The Fed has taken a cautious approach, citing inflation risks. Trump has publicly criticized Powell, calling him a “moron,” a “stubborn mule,” a “Trump Hater,” and “Mr. Too Late.”

Against this backdrop, one question remains: will the legal clash reshape the balance between political pressure and central bank independence?

Confirmation Standoff and Senate Resistance

The investigation has also complicated the Senate confirmation process for Kevin Warsh, the former Fed governor whom Trump selected to succeed Powell when his term ends in May.

Republicans have sought a resolution to the standoff. The dispute threatens to delay Warsh’s confirmation. Treasury Secretary Scott Bessent addressed the matter on CNBC, saying, “There were subpoenas issued. But that doesn’t have to mean that there are charges.”

Earlier in January, Bessent told CBS, “I think that the message is that independence does not mean no accountability.”

Sen. Thom Tillis, a Republican from North Carolina, has said he will not advance any Fed nomination, including Warsh’s, until the Justice Department concludes its probe. All Democrats on the Senate Banking Committee have taken the same position. As a result, the committee’s 13-11 Republican majority cannot move a nominee forward without Tillis.

Tillis has warned that steps taken outside traditional channels could erode investor confidence in the Federal Reserve’s ability to set interest rates without political interference.

Trump has signaled that Pirro intends to pursue the investigation fully. On Feb. 2, he told reporters at the White House that Pirro “is going to take it to the end and see.” During that appearance, he described the renovation cost as $4 billion, exceeding the $2.5 billion figure previously cited.

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