Federal Reserve Chair Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee at the Federal Reserve on Oct. 29, 2025 in Washington, DC.
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Kevin Warsh, nominee for chairman of the Federal Reserve, arrives for his Senate Banking, Housing and Urban Affairs Committee confirmation hearing in the Dirksen building, April 21, 2026.
Tom Williams | Cq-roll Call, Inc. | Getty Images
Pirro on Friday said that the Fed’s inspector general, an internal watchdog, had been asked to investigate cost overruns in the headquarters project, which had been the purported basis for her criminal probe of Powell.
The Fed chair, and others, had said that the real reason for the investigation was to pressure Powell and the Fed to lower interest rates as Trump wanted.
“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said in her X post on Friday.
“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,” she said.
“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry,” Pirro said.
“Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”
White House spokesman Kush Desai, in a statement, said, “American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter.”
“The White House remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision-making,” Desai said.
The Federal Reserve declined to comment.
CNBC has requested comment from Pirro’s office, Warsh, and Tillis, as well as Senate Banking Committee Chairman Tim Scott, R-S.C., and other members of that committee.
Earlier this week, Scott, R-S.C., advocated ending the criminal probe and turning the matter over to Congress.
In a CNBC interview, Scott said switching the probe was essential to getting Warsh confirmed as chair, after which the information relevant to the project could be made available.
Scott suggested working with the House Financial Services Committee to “establish a committee that would have permanent oversight of construction projects within the jurisdiction of the banking committee.”
“Wherever that leads us, we should go. If that leads to a criminal referral, so be it,” Scott said. “But give us Kevin Warsh at the Fed so that we have access to all the information necessary.
Scott also said he thought Powell “was incompetent, not criminal.”
— CNBC’s Jeff Cox, Kevin Breuninger, Matt Peterson, and Emily Wilkins contributed to this article.
