Pirro closes investigation into Federal Reserve over building project

U.S. Attorney for the District of Columbia Jeanine Pirro announced Friday she directed her office to close its investigation into the Federal Reserve over a building project, a move that could lead a key Senate holdout to now vote to advance President Donald Trump's nominee for Fed chair.

Pirro said the Fed's inspector general, Michael Horowitz, would take over the investigation, moving it from the hands of federal prosecutors into those of a longtime government watchdog. The move relieves pressure on the central bank amid a fight over an anticipated leadership change in mid-May, when Fed Chairman Jerome Powell's term is set to end. 

Retiring Sen. Thom Tillis, R-N.C., had been threatening to block Trump's chosen successor to Powell over the Department of Justice's probe.

"This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns – in the billions of dollars – that have been borne by taxpayers," Pirro wrote on X. "The IG has the authority to hold the Federal Reserve accountable to American taxpayers. I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas."

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"Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry," Pirro said, adding that she would "not hesitate" to reopen a criminal investigation "should the facts warrant doing so."

Pirro's comments come after Powell revealed in a video announcement in January that the Department of Justice had opened an investigation into the Fed, calling it an unprecedented attempt to use "intimidation" to force him to lower interest rates.

The investigation had encountered a roadblock after Judge James Boasberg, chief judge of the federal district court in Washington, D.C., blocked the department from subpoenaing the Fed.

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In the lead-up to the investigation, Trump and Powell's relationship had grown increasingly rocky, as Trump became frustrated over interest rates and began targeting Powell, whom he nominated in 2017. Trump called Powell a "fool" and demanded in March that he drop rates "immediately."

Tillis, who has a background in finance and sits on the Senate Banking Committee, had vowed to block Kevin Warsh's confirmation because of the DOJ's investigation, after Trump nominated Warsh to replace Powell, whose term was set to expire on May 15.

Tillis had claimed the DOJ's investigation was political and would improperly interfere with markets, and he accused Pirro of seeking "brownie points" with Trump by opening it. "It’s not cute," Tillis had said during a television interview in February.

During his confirmation hearing this week, Tillis told Warsh, who previously served on the Fed's Board of Governors, that he had "extraordinary credentials" but that he could not vote to advance his nomination in the Senate until the DOJ ended its investigation.

Fox News Digital reached out to Tillis about Pirro's announcement.

Horowitz, who will now investigate the Fed building renovation costs, had drawn a mix of praise and criticism from Republicans while serving as DOJ inspector general for more than a decade. He was one of the few high-profile inspectors general spared during Trump's historic cull of government watchdogs last year and has found allyship in key figures like House Judiciary Committee Chairman Jim Jordan, R-Ohio.

Horowitz became known in part for investigating the FBI's probe of the Trump 2016 campaign's ties to Russia. He found in 2019 that the bureau made "significant errors or omissions" when seeking approval from the court of Foreign Intelligence Surveillance Act warrants, a finding that sparked widespread demands for FISA reforms that remain a source of controversy on Capitol Hill to this day.

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Still, some in Trump's base were disappointed when Horowitz released a long-anticipated report in 2024 finding that while the FBI had roughly two dozen sources around D.C. during the Jan. 6 Capitol breach, the bureau had not directed any of them to enter the Capitol or otherwise break the law, a finding that debunked a theory that federal authorities had helped cause the riot.

Horowitz left the DOJ last year after Powell appointed him to oversee the Fed and Consumer Financial Protection Bureau.