The Justice Department’s criminal probe tied to Federal Reserve Chair Jerome Powell’s testimony about a building renovation was closed in April 2026. The Federal Reserve’s inspector general later found no grounds in its evaluation for a criminal-law referral, while documenting serious shortcomings in renovation oversight and cost controls. On October 2, Axios reported that Attorney General Todd Blanche said DOJ would not reopen the matter.
Why did DOJ issue subpoenas to Powell?
On January 11, 2026, Powell said the Justice Department had served grand jury subpoenas on the Federal Reserve. He connected them to his June 2025 testimony before the Senate Banking Committee about the multi-year renovation of historic Federal Reserve buildings. Powell said the Fed had tried to keep Congress informed.
Powell also interpreted the investigation as part of broader pressure over interest rates. That was his account of the political context, not a finding by the inspector general. In his January statement, he said: “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.” He added: “Public service sometimes requires standing firm in the face of threats.”
What happened to the criminal probe?
- January 11, 2026: Powell announced the subpoenas and said they concerned his Senate testimony about the renovation.
- April 24, 2026: The Federal Reserve Office of Inspector General’s later report recorded that the U.S. Attorney’s Office had announced the criminal probe was closed. The OIG continued its separate evaluation.
- September 29, 2026: The OIG published its evaluation of the criminal-referral question and the renovation’s management.
- October 2, 2026: Axios reported that Blanche, in a Bloomberg interview, said DOJ would not reopen the investigation. This is Axios’s account of his remarks; no direct DOJ announcement of that position is cited here.
Axios also reported that Powell’s term as Fed chair had expired in May 2026, while his term as a Federal Reserve governor runs through January 2028.
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No. The OIG said its evaluation found no reasonable grounds to believe a federal criminal-law violation had occurred that required referral to the attorney general. It also said it had not identified administrative misconduct. The report’s wording was: “At no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred requiring a referral to the U.S. Attorney General.”
This is the OIG’s conclusion about the evidence and referral threshold within its evaluation. It is not a court verdict, nor does it mean a court adjudicated every allegation.
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What did the OIG criticize about the renovation?
The OIG found substantial weaknesses in project controls and governance. Its report said no project-level guaranteed maximum price had been established as of July 2026. The Board issued 84 limited-scope construction price packages without an overall cost ceiling, and internal governance did not clearly assign responsibility for cost and budget oversight. The OIG also criticized project dashboards that continued to label the work “on track” while cost and schedule benchmarks were revised.
The report identified inflation, limited subcontractor bidding, significant design changes, and site conditions as factors contributing to construction cost increases. It said more effective management and contract execution could have mitigated the effect of some factors. It also found that certain design features that attracted scrutiny did not materially contribute to the construction cost increases.
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How much did the Federal Reserve renovation cost?
The figures below are Board-approved budget amounts reported by the Federal Reserve OIG in 2026, not a statement of final spending. The total project budget includes more than construction; those amounts should not be treated as interchangeable.
| Budget measure | February 2020 | December 2024 | August 2026 |
|---|---|---|---|
| Total renovation budget | $1.317 billion | $2.381 billion | $2.381 billion |
| Construction portion | $921 million | $2.018 billion | Not stated (Federal Reserve OIG, 2026) |
The OIG reported that the total Board-approved budget rose from $1.317 billion in February 2020 to $2.381 billion in December 2024; it reported the same $2.381 billion total budget as of August 2026. The construction portion rose from $921 million to $2.018 billion between February 2020 and December 2024. These are budget figures, not a final audited tally of what the completed project ultimately cost.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What does this mean for interest rates and household finances?
The renovation probe and the Fed’s rate decisions are related in Powell’s account of the pressure he faced, but they are distinct issues. The reported developments do not themselves announce a change in the federal funds rate or establish a specific effect on mortgage, credit-card, or savings rates. Those rates depend on broader monetary and market conditions; this case alone is not a reliable basis for predicting what a household will pay or earn.
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