In a scathing ruling, a federal judge blocked subpoenas issued by a grand jury to the Federal Reserve as part of a criminal investigation into President Jerome Powell.
U.S. Attorney Jeanine Pirro for the District of Columbia said the Justice Department would appeal what she called an “outrageous” ruling after Friday’s unsealing.
Friday’s move would keep Powell in the presidency longer because Sen. Thom Tillis, RN.C., has vowed to block the confirmation of Kevin Warsh to succeed Powell until the federal investigation ends.
That means higher interest rates will stay longer than President Donald Trump wants, as Powell has refused to bow to the president’s demands to lower them further.
US District Judge James Bosberg, in his ruling, said the evidence showed the Fed chief was motivated to investigate Perro Powell because of his desire to bow to Trump and cut interest rates quickly and broadly.
Pirro’s investigation has focused on the Fed’s purported multibillion-dollar renovation of its headquarters in Washington and on Powell’s testimony to the Senate Banking Committee about that project.
“Did the prosecutors issue those subpoenas for a proper purpose? The court finds that they did not,” Boesberg wrote in a lawsuit filed Wednesday in U.S. District Court in Washington, but closed Friday.
“There is ample evidence that the dominant (if not the only) purpose of the subpoenas was to harass and pressure Powell to either yield to the president or resign and make way for the Fed chair,” the judge wrote.
“On the other side of the scale, the government has offered no evidence that Powell committed any crime other than displeasing the president,” Boesberg wrote.
Pirro blasted Bosberg’s ruling as “outrageous” at a press conference Friday.
“Jerome Powell is now bathed in immunity,” she raged. “This is wrong, and it has no legal authority.”
Tillis, in a post on Friday X, predicted the ruling would stand.
“This verdict confirms how weak and futile the criminal investigation of Chairman Powell is, and that it is nothing more than a failed attack on Fed independence,” he said. “We all know how this will end and the DCUS Attorney’s Office must endure further embarrassment.”
The Federal Reserve declined to comment when contacted by CNBC.
Boesberg’s ruling and the DOJ’s planned appeal are likely to keep Powell in his position as Fed chairman until his term expires in May.
Tillis’ hopeful “no” vote in the Banking Committee to proceed with Warsh’s nomination would have stalled that panel, preventing Warsh from getting a confirmation vote from the full Senate.
Trump’s desire for the Fed to cut interest rates further is further complicated by the Iran war.
Rising fuel costs are likely to keep policymakers from easing until there is greater clarity about when and how the war will end.
Federal Reserve Chair Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee at the Federal Reserve on October 29, 2025 in Washington.
Alex Wang | Getty Images News | Getty Images
Recent statements by Fed officials have indicated a more cautious approach to further cuts, with the exception of governors Stephen Miron and Christopher Waller, who have favored lower rates.
Markets have already pushed back any hope of a rate cut until the end of the year. Before the war, the market was pricing in at least two cuts.
– CNBC Eamon Javers And Jeff Cox contributed to this article
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