Justice Department will not reopen its criminal probe of Jerome Powell

Attorney General Todd Blanche said no new investigation is coming, days after the Fed's own watchdog found no criminal violations.

Assembled by Claude from 9 sources at 8 outlets · Friday, October 2, 2026, Evening edition, 5:24 PM EDT · no human byline

What happened

The US Justice Department is not reopening a criminal investigation into former Federal Reserve Chair Jerome Powell over cost overruns related to the central bank's renovation, Attorney General Todd Blanche said reuters.combloomberg.com. "We're not reopening a criminal investigation into him," Blanche told Bloomberg cnbc.com.

Politico and Axios reported the same decision, describing the inquiry as having centred on the costly renovation of the central bank's headquarters politico.comaxios.com. Powell is the sixteenth chair of the US Federal Reserve cnbc.com.

The decision followed a finding by the Fed's own inspector general. The watchdog found no criminal violations in the renovations pressreader.com. Tech Times reported that the inspector general cleared Powell and that forced removal is now blocked by the Supreme Court techtimes.com.

Why it matters to investors

President Donald Trump responded the same day with a post on Truth Social demanding that Powell resign immediately techtimes.com. "This is Jerome Powell's fault, and he should be forced to resign, IMMEDIATELY!" Trump said pressreader.com.

Trump has continued to demand that Powell quit the Fed board despite the watchdog finding no criminal misconduct tvcnews.tv. In his second term, Trump launched what TVC News described as an unprecedented assault on the Fed's independence as he demanded that the central bank cut rates to spur economic activity tvcnews.tv.

Bloomberg reported that since the start of his second term Trump has waged a fierce campaign to impose his will on the Federal Reserve, breaking with the precedent set by earlier presidents bloomberg.com. The question of whether he can oust Powell from the board, as distinct from the chair's seat, remains open bloomberg.com.

What to watch

Two separate tracks now matter for the Fed's governance. The criminal track is closed for the moment, with both the Justice Department and the inspector general declining to find wrongdoing reuters.compressreader.com. The removal track runs through the courts, where Tech Times reported that forced removal is blocked techtimes.com.

For investors, the live variable is not the renovation accounting but whether a sitting governor can be removed at will, and what that would mean for how markets price the committee's reaction function bloomberg.comtvcnews.tv.

Reuters and Bloomberg both reported the decision as coming from the attorney general directly rather than through a filing, which leaves no formal record for markets to read against reuters.combloomberg.com. Axios and Politico described the underlying matter as the cost of the headquarters renovation, a dispute over construction accounting rather than over monetary policy axios.compolitico.com.

Sources

1. reuters.com: Blanche says DOJ is not reopening criminal probe into Fed's Powell, Bloomberg News reports (2026-10-02)
2. bloomberg.com: DOJ Not Reopening Criminal Probe Into Fed's Powell, Blanche Says - Bloomberg.com (2026-10-02)
3. cnbc.com: DOJ says it will not reopen criminal probe into former Fed Chair Powell - CNBC (2026-10-02)
4. politico.com: DOJ will not reopen criminal probe of Powell, Blanche says - POLITICO (2026-10-02)
5. axios.com: DOJ says it won't reopen probe into Fed's Powell - Axios (2026-10-02)
6. techtimes.com: Federal Reserve IG Clears Powell: Forced Removal Now Blocked by Supreme Court (2026-10-02)
7. tvcnews.tv: Trump Demands Powell Quit Fed Board Despite Watchdog Finding No Criminal Misconduct (2026-10-01)
8. pressreader.com: Fed's watchdog finds no criminal violations in renovations | The Beaufort Gazette (2026-10-02)
9. bloomberg.com: Can Trump Oust Powell From the Fed Board? What to Know - Bloomberg.com (2026-10-02)