Judge blocks subpoenas against Fed chair Powell, DOJ to appeal

WASHINGTON - A US judge on March 13 blocked subpoenas issued in a criminal investigation into Federal Reserve chairman Jerome Powell by a prosecutor appointed by US President Donald Trump, agreeing with Mr Powell that the probe was an improper attempt to intimidate the central bank into cutting interest rates.

US Attorney for the District of Columbia Jeanine Pirro, whose office is spearheading the investigation involving cost overruns in renovations at the central bank’s headquarters, said the Justice Department will appeal against US District Court Chief Judge James Boasberg’s decision.

Judge Boasberg concluded that the subpoenas were issued for an improper purpose and thus not legally valid.

“The government has offered no evidence whatsoever that Powell committed any crime other than displeasing the President,” the judge wrote. “The government might as well investigate him for mail fraud because someone once saw him send a letter.”

The March 13 developments leave in limbo both the Powell investigation and the Republican President’s attempt to install a more rate cut-friendly Fed chairman, former Fed governor Kevin Warsh, when Mr Powell’s leadership term expires in mid-May.

Mr Powell, a frequent target of Mr Trump’s ire, disclosed the investigation on Jan 11, denouncing it as a threat to the Fed’s independence.

Ms Pirro, appointed by Mr Trump in 2025, responded with fury to the judge’s ruling, angrily accusing Judge Boasberg during a news conference of infringing on her authority as a prosecutor and protecting Mr Powell from scrutiny.

“As a result, Jerome Powell today is now bathed in immunity,” Ms Pirro told reporters, adding that her suspicion that a law was violated is enough reason to pursue cases.

The Fed’s board of governors had asked the judge to quash the subpoenas, which sought information about the renovations of two historic buildings at the Fed headquarters complex in Washington as well as Mr Powell’s July 2025 testimony before the Senate Banking Committee.

Mr Powell has defended the Fed’s spending on the renovations as necessary, and hosted lawmakers and Mr Trump on a visit to the Fed to tour the ongoing project.

Mr Trump has made demands since returning to the presidency in 2025 that the ​Fed cut interest rates faster and further than it has been willing to do under Mr Powell’s leadership in the face of persistent inflation worries.

Mr Trump appointed Mr Powell during his first term as president, but has since hurled insults at him, such as calling him a “numbskull”.

The judge agreed with Mr Powell over the nature of the investigation, saying a “mountain of evidence” suggests it was intended to pressure the Fed chairman to lower rates or resign.

“The government has produced essentially zero evidence to suspect chair Powell of a crime; indeed, its justifications are so thin and unsubstantiated that the court can only conclude that they are pretextual,” Judge Boasberg wrote.

The ruling for now will make it difficult for the Justice Department to proceed with its investigation.

Prosecutors said they are examining whether Mr Powell made false statements to Congress and committed fraud, according to court documents made public on March 13.

A Fed spokesperson declined to comment.

Senator takes aim

Republican Senator Thom Tillis has vowed to use his spot on the Senate Banking Committee to block any nominee to the Fed while the investigation stays open, saying that statements Mr Powell made to lawmakers did not amount to a crime.

That view is held by several other Republicans on the Senate Banking Committee, including its chairman Tim Scott, who led the questioning of Mr Powell over the renovations that are at the heart of Ms Pirro’s investigation.

A Justice Department appeal against the ruling “will only delay the confirmation of Kevin Warsh as the next Fed chair”, Mr Tillis said on March 13.

In his pressure campaign against the central bank’s leaders, Mr Trump last August also sought to fire Fed governor Lisa Cook, citing unproven mortgage fraud allegations – which she has denied – as justification to oust her.

It was the first such move by any president to try to dismiss a Fed governor since the central bank was created in 1913.

Ms Cook also has called the mortgage fraud allegations a pretext by Mr Trump to fire her for monetary policy differences.

US Supreme Court justices signalled scepticism on Jan 21 towards Mr Trump’s bid to fire Ms Cook. The court has not yet ruled on the matter.

March 13’s ruling was the latest court setback for the Trump Justice Department as it pursues investigations into critics and antagonists of the President.

A judge in November dismissed indictments against former Federal Bureau of Investigation chief James Comey and New York state Attorney-General Letitia James, who each previously led investigations into Mr Trump.

Judge Boasberg, an appointee of Democratic former president Barack Obama, in his ruling wrote that being an adversary to Mr Trump “has become risky in recent years”.

The judge has frequently clashed with the Trump administration in cases he has overseen, and the President in 2025 called for Congress to impeach him.

Judge Boasberg began contempt proceedings against the administration in 2025 after he found that officials had violated his emergency order blocking the use of emergency powers to deport migrants.

Those proceedings have since been halted by a federal appeals court. REUTERS