By Andrew Goudsward and Ann Saphir
March 13 (Reuters) – A U.S. judge on Friday blocked subpoenas issued in a criminal investigation into Federal Reserve Chair Jerome Powell by a prosecutor appointed by President Donald Trump, agreeing with Powell that the probe was an improper attempt to intimidate the central bank into cutting interest rates.
U.S. 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 Chief U.S. District Judge James Boasberg’s decision.
Boasberg concluded that the subpoenas were issued for an improper purpose and thus not legally valid.
‘NO EVIDENCE WHATSOEVER’
“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.”
Friday’s developments leave in limbo both the Powell investigation and the Republican president’s attempt to install a more rate-cut-friendly Fed chair, former Fed governor Kevin Warsh, when Powell’s leadership term expires in mid-May.
Powell, a frequent target of Trump’s ire, disclosed the investigation on January 11, denouncing it as a threat to the Fed’s independence.
Pirro, appointed by Trump last year, responded with fury to the judge’s ruling, angrily accusing Boasberg during a news conference of infringing on her authority as a prosecutor and protecting Powell from scrutiny.
“As a result, Jerome Powell today is now bathed in immunity,” 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 Powell’s July 2025 testimony before the Senate Banking Committee.
Powell has defended the Fed’s spending on the renovations as necessary, and hosted lawmakers and Trump on a visit to the Fed to tour the ongoing project.
Trump has made demands since returning to the presidency last year that the Fed cut interest rates faster and further than it has been willing to do under Powell’s leadership in the face of persistent inflation worries. Trump appointed Powell during his first term as president, but since has hurled insults at him such as calling him a “numbskull.”
The judge agreed with Powell over the nature of the investigation, saying a “mountain of evidence” suggests it was intended to pressure the Fed chair 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,” 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 Powell made false statements to Congress and committed fraud, according to court documents made public on Friday.
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 that 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 chair Tim Scott, who led the questioning of Powell over the renovations that are the heart of Pirro’s investigation.
A Justice Department appeal of the ruling “will only delay the confirmation of Kevin Warsh as the next Fed Chair,” Tillis said on Friday.
In his pressure campaign against the central bank’s leaders, Trump last August also sought to fire Federal Reserve 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. Cook also has called the mortgage fraud allegations a pretext by Trump to fire her for monetary policy differences.
U.S. Supreme Court justices signaled skepticism on January 21 toward Trump’s bid to fire Cook. The court has not yet ruled on the matter.
Friday’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 FBI chief James Comey and New York state Attorney General Letitia James, who each previously led investigations into Trump.
Boasberg, an appointee of Democratic former President Barack Obama, in his ruling wrote that being an adversary to Trump “has become risky in recent years.”
Boasberg has frequently clashed with the Trump administration in cases he has overseen, and the president last year called for Congress to impeach him.
Boasberg began contempt proceedings against the administration last year 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.
(Reporting by Ismail Shakil, Andrew Goudsward, Jasper Ward, Ann Saphir, Editing by Will Dunham)
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