Fed Inspector General clears Jerome Powell in headquarters work affair

The general inspection of the American Federal Reserve (Fed) found no element justifying criminal proceedings against its former president Jerome Powell, in a work affair which occupied the mind of Donald Trump for months. The president and former real estate developer found the slippage in the bill for the renovation of the central bank headquarters in Washington suspicious.

He ended up supporting the opening of a judicial investigation against the man who then headed the institution, Jerome Powell. He revealed the existence of the procedure in January, denouncing a “pretext” and an unprecedented attack against the independence of the central bank, responsible in particular for fighting inflation. The head of state had been seeking for months to oust him on the grounds that he was piloting a monetary policy that was too austere for his taste.

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“At no time during our evaluation did we find reasonable grounds to believe that an infraction of federal criminal law was committed, justifying a referral” to justice, wrote the General Inspectorate (OIG) of the Fed in a report posted online Wednesday. “Although our report highlights shortcomings in the management of the renovation project, (...) we did not find any administrative misconduct during our evaluation,” adds the organization.

The cost of the renovation and expansion project - still in progress in the American capital - had increased from 1.3 billion dollars in February 2020 to nearly 2.4 billion in December 2024, it is specified in the document. The Federal Reserve notably explained that it faced a surge in construction costs (materials, labor) over the period. The OIG was contacted by Jerome Powell himself in July 2025, when he was facing a barrage of criticism from the head of state concerning the level of interest rates.

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“Witch hunt”

After declaring him incompetent, Donald Trump began to question his integrity. According to him, the soaring cost of renovation work at the Fed headquarters could hardly be explained other than by “fraud”. He even made a surprise visit to the site at the end of July 2025, helmet on, alongside Jerome Powell. The head of state then did not discourage prosecutor Jeanine Pirro when she launched a procedure that could lead to criminal proceedings against the central banker.

The revelation of this approach in January 2026 by Jerome Powell triggered an outcry from the economic world, keen to preserve the independence of the institution. It had also cracked the Republican majority, blocking the nomination of Mr. Powell's successor (whose mandate ended in the spring) designated by Donald Trump, Kevin Warsh. Prosecutor Pirro, appointed by the president, ended up closing the investigation in April, leaving the case in the hands of the general inspectorate. And Kevin Warsh was able to take office.

The report confirms “that federal prosecutor Jeanine Pirro and Justice Minister Todd Blanche, loyal servants of Trump, have no basis for relaunching the witch hunt” against Jerome Powell, responded Democratic Senator Elizabeth Warren in a statement. “The president should stop trying to fire Fed governors to cover up his economic failures and instead end his chaotic tariffs and war in Iran,” she added.

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The American president, who also tried to fire Governor Lisa Cook, was prevented from doing so by the Supreme Court. Jerome Powell still sits at the Fed, as simple governor. He explained that he preferred to stay there as long as pressure against him remained.