A U.S. district judge on Friday refused to overturn his earlier decision that blocked subpoenas tied to a criminal investigation of Federal Reserve Chair Jerome Powell, a ruling that virtually ensures an appeal and could further stall President Donald Trump’s effort to replace Powell with a more pliant Fed chief. Chief Judge James Boasberg of the District of Columbia denied the Justice Department’s request for reconsideration, leaving intact his March 13 finding that the subpoenas were issued for an improper purpose.
Boasberg’s March ruling concluded that subpoenas served on the Fed’s Board of Governors in January were not ordinary investigative steps but appeared intended to pressure Powell to accede to the White House’s demands — to rapidly cut interest rates or resign. The subpoenas, issued by Washington D.C.’s top federal prosecutor, Jeanine Pirro, sought documents about cost overruns in renovations at Federal Reserve headquarters and Powell’s testimony to Congress last year about the project.
Prosecutors from Pirro’s office have said they are investigating Powell for possible fraud and false statements to a congressional committee. But during court proceedings earlier this month a senior lawyer in Pirro’s office acknowledged that prosecutors do not yet know what evidence, if any, demonstrates Powell committed a crime — a point Boasberg factored into his earlier judgment that the subpoenas served an improper motive.
Justice Department lawyers argued in filings that Boasberg applied too exacting a standard at an early investigatory stage and misread the probe’s timeline. To reverse his ruling, the judge said prosecutors would have to show either new evidence or that he had made a clear legal error — a high bar the DOJ failed to meet in its reconsideration bid. Lawyers for the Fed’s Board of Governors told the court Boasberg’s initial decision was supported by “overwhelming evidence.”
Pirro has vowed to continue the investigation and her office said it is prepared to appeal. According to a person familiar with the matter, leaders at the Justice Department have backed the decision to take the case to the U.S. Court of Appeals for the D.C. Circuit. Such an appeal would likely further prolong litigation and could delay Senate action on Trump’s nominee to succeed Powell, Kevin Warsh.
Senator Thom Tillis, a Republican member of the Senate Banking Committee who has publicly criticized the probe, said he would continue to block Warsh’s confirmation vote while the appeal is pending. Powell has said he will not step down until the investigation is resolved, effectively tethering the Fed chair’s tenure to ongoing legal proceedings and raising the prospect of a protracted period of uncertainty at the central bank.
The dispute highlights growing tensions between the Justice Department’s local prosecutors in Washington aligned with Trump allies and long-standing concerns about politicizing the Federal Reserve. With the D.C. Circuit appeal now likely, the litigation timetable — and any impact on monetary policymaking or the confirmation calendar — will depend on how quickly the appellate court takes up the case and whether it affirms Boasberg’s finding that the subpoenas were improperly motivated.