Summary
A federal judge has reaffirmed a prior ruling that blocked subpoenas issued in a criminal investigation concerning Federal Reserve Chair Jerome Powell. The refusal to rehear the matter keeps the inquiry on hold and likely sends the case to the U.S. Court of Appeals for the D.C. Circuit, where prosecutors and local prosecutors say they are prepared to press their challenge. The decision also leaves intact a legal obstacle that could slow the confirmation process for President Trump’s nominee to succeed Powell.
Judge's Ruling and Legal Background
Chief U.S. District Judge James Boasberg of the District of Columbia denied the Justice Department’s request to revisit his earlier determination. In a March 13 ruling, Boasberg concluded that subpoenas issued in January to the Federal Reserve’s Board of Governors were sought for an improper purpose - namely, to pressure Powell to either dramatically lower interest rates or to resign. That March 13 order effectively halted the criminal probe into Powell while the legal question over the subpoenas remains unresolved.
The subpoenas at issue were issued by Washington D.C.’s top federal prosecutor, Jeanine Pirro. They sought records related to cost overruns on renovations at the Federal Reserve’s headquarters and materials connected to Powell’s testimony before Congress last year about that project. The judge found the subpoenas were issued in a manner that improperly sought to influence Powell’s actions on monetary policy and his tenure.
Parties' Positions and Next Steps
Pirro has signaled her intention to continue the investigation and has stated her office is prepared to appeal Boasberg’s ruling to the U.S. Court of Appeals for the D.C. Circuit. Justice Department leadership has backed the decision to pursue an appeal, according to a source familiar with the matter. Prosecutors have indicated they are investigating potential fraud charges and possible false statements to a congressional committee.
At the same time, a lawyer from Pirro’s office acknowledged in court on March 3 that prosecutors do not currently know what evidence exists to show Powell committed a crime, a fact recorded in a court transcript. That acknowledgment contrasted with the office’s stated readiness to proceed.
Standards for Reconsideration and Arguments Presented
Pirro’s office faced a demanding legal threshold to persuade the judge to change course. To obtain reconsideration, prosecutors needed to demonstrate either that new evidence had emerged or that Boasberg committed a clear legal error in his original ruling. Justice Department attorneys argued the judge set too onerous a standard for prosecutors at the preliminary stage of an investigation and that he had misread the timeline of events. Lawyers representing the Fed’s Board of Governors countered that Boasberg’s initial decision was supported by "overwhelming evidence."
Potential Political and Institutional Consequences
The appeal process could have direct implications for the confirmation timeline of Kevin Warsh, President Trump’s nominee to replace Powell as chair of the Federal Reserve. Senator Thom Tillis, a Republican member of the Senate Banking Committee who has criticized the investigation into Powell, has pledged to continue blocking Warsh’s nomination while any appeal is pending. Powell has publicly stated he will not leave his post until the investigation concludes.
The dispute highlights a legal and political standoff involving federal prosecutors, the judiciary, and the independence of the central bank. For now, the judge’s reaffirmation preserves the suspension of the subpoenas and leaves the next phase to appellate review.