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Judge Blocks DOJ Subpoenas Targeting Fed Chair Powell, Citing Political Pressure

Judge Blocks DOJ Subpoenas Targeting Fed Chair Powell, Citing Political Pressure
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A federal judge in Washington blocked Justice Department subpoenas targeting Federal Reserve Chair Jerome Powell, ruling that prosecutors had “produced essentially zero evidence” to justify a criminal investigation and suggesting the effort was designed to pressure Powell over interest-rate policy rather than uncover wrongdoing reuters +1. The decision, unsealed Friday, was a sharp rebuke to a Trump-appointed prosecutor and immediately raised new questions about political interference in the traditionally independent central bank reuters +1.

The 27-page opinion by U.S. District Judge James E. Boasberg quashed grand-jury subpoenas seeking Federal Reserve records tied to costly renovations at the central bank’s headquarters and to Powell’s prior congressional testimony about those projects nbcnews +1. Prosecutors led by Acting U.S. Attorney Jeanine Pirro had framed the probe as a corruption and false-statements case; Boasberg concluded instead that “a mountain of evidence” showed the subpoenas’ dominant purpose was to harass Powell and pressure him to vote for lower interest rates or step down nbcnews +2.

A Legal Rebuke and a Clash Over Fed Independence

Boasberg applied long-standing precedent that allows judges to void subpoenas when their “sole or dominant” purpose is improper, finding the government’s justifications “thin and unsubstantiated” and its evidentiary basis virtually nonexistent axios +1. He wrote that prosecutors had offered “no evidence whatsoever that Powell committed any crime other than displeasing the President,” language that legal analysts said underscored the severity of his concerns about political misuse of the grand jury reuters +1.

Powell had gone public with the investigation in a January 11 video, calling it a threat to the Fed’s independence and saying subpoenas over the building renovations and his testimony were unprecedented in modern central banking nbcnews +1. The probe unfolded against months of public attacks from President Trump, who has repeatedly demanded deeper rate cuts as the Fed cautiously lowered borrowing costs three times last year nbcnews. Markets and governance experts warned that a criminal case built around policy disputes could chill future chairs and undermine global confidence in U.S. monetary policy axios.

DOJ Vows Appeal as Fed Succession Fight Intensifies

Pirro denounced the ruling as “untethered to the law” and vowed to appeal, arguing that quashing the subpoenas left Powell “bathed in immunity” and improperly shielded potential crimes involving misuse of public funds and false testimony to Congress reuters +1. Justice Department officials insisted they were pursuing a legitimate corruption case centered on the multibuilding renovation project, which had already drawn criticism on Capitol Hill for its cost and scope nytimes +1.

The decision immediately complicated the White House’s efforts to install former Fed governor Kevin Warsh as Powell’s replacement before Powell’s term ends in mid-May 2026 reuters +1. Senator Thom Tillis, a North Carolina Republican, reiterated that he would continue to block any Fed nominee while the Powell probe remains in flux, warning that an appeal could prolong the vacancy and further politicize the central bank abcnews +1. Supporters of the ruling said it laid bare a “weak and frivolous” case and should close the door on using criminal tools to fight monetary policy battles abcnews.

The Bigger Picture

The clash over the Powell subpoenas landed at the intersection of law, politics and central banking, turning an obscure dispute over headquarters renovations into a test of whether the Justice Department can be used to pressure an independent regulator. The outcome of the government’s planned appeal will not only determine Powell’s legal exposure and the timing of his potential successor, but also signal how far courts are willing to go in policing political incursions into monetary policy—an answer that markets, foreign central banks and future Fed chairs are all now watching closely.