A federal judge on Friday dismissed subpoenas issued by the Justice Department as part of a criminal investigation into Federal Reserve Chair Jerome Powell, dealing a setback to an inquiry that had complicated President Donald Trump's effort to install Kevin Warsh as the next leader of the central bank.
The investigation, opened by U.S. Attorney for the District of Columbia Jeanine Pirro, focused on Powell's handling of renovations at the Fed's headquarters.
The subpoenas had been widely viewed on Capitol Hill as the chief obstacle to advancing Warsh's nomination.
However, Pirro signaled that the investigation could continue despite the ruling, leaving uncertainty over whether the path for Warsh's confirmation will clear, The New York Times reported on Saturday.
Several members of the Senate Banking Committee, including Sen. Thom Tillis, R-N.C., have said they will block any Fed leadership nominations while the investigation remains active, calling it a politically motivated attack on the Federal Reserve's independence. Democrats on the committee have also indicated they would oppose Trump's nominee.
Trump nominated Warsh, a former Fed governor, in January to succeed Powell when his term as chair expires in May.
Although Republicans control the Senate, their narrow majority means a single GOP defection could stall the nomination.
The episode highlights the long-running tensions between Trump and Powell. During both his first and second terms, Trump repeatedly criticized Powell for keeping interest rates too high and failing to aggressively cut borrowing costs.
Trump has frequently sought to pressure the central bank, an institution designed to operate independently from political influence, arguing that lower rates would accelerate economic growth.
Powell, whom Trump originally appointed Fed chair in 2018, has resisted those calls, emphasizing the Fed's independence and its mandate to control inflation and maintain financial stability.
The Trump administration has also attempted to remove or sideline other Fed officials, including Governor Lisa D. Cook, whose dismissal attempt is now before the Supreme Court.
Another key figure in the case is Chief U.S. District Judge James "Jeb" Boasberg, who ruled that the Justice Department's subpoenas targeting Powell lacked sufficient legal basis. Boasberg has repeatedly clashed with the Trump administration over the past year in a series of high-profile rulings.
In 2025, he temporarily blocked the administration from using the centuries-old Alien Enemies Act to rapidly deport Venezuelan migrants and later ordered officials to facilitate the return of or hearings for deportees he said were denied due process.
Those rulings made Boasberg a frequent target of criticism from Trump allies, who argue that federal judges have increasingly used nationwide injunctions and other legal tools to slow or block key elements of the president's agenda.
Powell's chairmanship ends in May, but he could remain on the Fed's Board of Governors until 2028. Court filings unsealed Friday suggest Powell intends to remain at the central bank during the investigation, arguing that doing so is necessary to defend the Fed's institutional independence.
The dispute underscores the escalating clash between the White House and the Federal Reserve, one that could shape monetary policy and the future leadership of the U.S. central bank in the months ahead.
James Morley III ✉
James Morley III is a writer with more than two decades of experience in entertainment, travel, technology, and science and nature.
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