President Donald Trump, speaking in the Oval Office on Monday, Feb. 2, 2026, said the Justice Department should continue the criminal investigation into Federal Reserve Chair Jerome Powell and “take it to the end,” praising U.S. Attorney Jeanine Pirro who is leading the inquiry. The comment came after a Republican senator warned he will block any new Fed chair nominee until the probe is resolved, a stance that could stall Kevin Warsh’s confirmation. Powell disclosed on Jan. 11 that he is the subject of a criminal probe, and his term as Fed chair expires in May, raising urgency around the nomination and the investigation’s timing. The exchange highlights a rare collision between the White House, the Justice Department and the Fed over institutional independence and an impending leadership decision.
Key Takeaways
- President Trump publicly backed the DOJ-led criminal inquiry into Fed Chair Jerome Powell on Feb. 2, 2026, urging U.S. Attorney Jeanine Pirro to continue the probe.
- Powell revealed on Jan. 11, 2026, that he is under criminal investigation; his Fed chair term ends in May 2026, creating a compressed window for any replacement.
- Trump named Kevin Warsh as his preferred successor after a months-long selection process; that announcement coincided with Sen. Thom Tillis declaring he will oppose any new Fed nominee until the investigation concludes.
- The Senate Banking, Housing, and Urban Affairs Committee has 13 Republicans and 11 Democrats; if Tillis sides with all Democrats, he could block Warsh from advancing to a full Senate vote.
- CNBC reported that the Federal Reserve has not yet complied with grand jury subpoenas issued as part of the probe, a procedural detail that could affect timing and leverage.
- Trump has repeatedly criticized the Fed’s renovation project as “yearslong” and “multibillion-dollar,” suggesting either incompetence or illicit conduct, claims the Fed disputes as it defends long-term cost reductions.
Background
Tensions between President Trump and the Federal Reserve have escalated over months, largely driven by disputes about interest-rate policy and the Fed’s independence. Trump and his allies repeatedly pressed the Fed to lower rates more rapidly than it was willing to do, arguing tighter monetary policy harmed growth and employment. In January 2026, Powell revealed he was the subject of a criminal investigation, an uncommon development for a sitting central bank chair and one that intensified scrutiny of the Fed’s operations.
The investigation centers in part on a multi-year, multibillion-dollar renovation of the Federal Reserve’s Washington headquarters, a project the Fed says will reduce operating costs over time despite rising line-item expenses. The probe is being led by U.S. Attorney Jeanine Pirro, which officials describe as an extraordinary inquiry into the central bank. Simultaneously, the White House moved to name Kevin Warsh as Powell’s prospective successor after a months-long vetting process, raising the political stakes around the legal review.
Main Event
On Feb. 2, 2026, in the Oval Office, Trump said reporters should let Pirro continue her work and “see” the outcome, signaling presidential support for the DOJ-led investigation. The remark followed a public declaration by Sen. Thom Tillis—made the prior Friday—that he would oppose any new Fed nominee until the probe is fully resolved. That stance matters because Tillis sits on the Senate Banking Committee, the panel that first considers Fed nominees.
The administration’s pick, Kevin Warsh, faces a potentially contentious committee review: the panel comprises 13 Republicans and 11 Democrats, and a coalition of Democrats plus a single Republican opposing Warsh could deadlock the nomination. CNBC reported that the Fed has not yet complied with grand jury subpoenas related to the investigation, a fact that may slow or complicate both investigative and confirmation timelines.
Trump reiterated long-standing criticisms of the Fed renovation, saying the cost overruns reflect either “gross incompetence” or “theft of some kind, kickbacks,” and again complimented Pirro’s handling of the probe. The Federal Reserve, for its part, has defended the renovation plan and provided explanations for cost increases, while emphasizing that its rate decisions are aimed at the public interest rather than presidential preferences.
Analysis & Implications
The episode raises immediate questions about separation of powers and the independence of monetary institutions. A sitting president publicly endorsing a criminal probe of the Fed chair and praising the prosecutor overseeing it risks perceptions of political pressure on law enforcement and central banking—issues that can affect investor confidence and domestic markets. If the investigation produces indictments or formal charges before May, the Fed would confront the unprecedented situation of a chair under legal jeopardy during a term as economic policy decisions proceed.
Procedurally, the nomination of Warsh now confronts two friction points: the Senate Banking Committee arithmetic and the unresolved legal inquiry. If Sen. Tillis remains opposed and aligns with Senate Democrats, Warsh could be trapped in committee, forcing either extended negotiations, a change of nominee, or a pro forma confirmation path that may be politically costly. The compressed timeline—Powell’s term ends in May—creates pressure to resolve either the investigation or the nomination quickly.
Longer term, sustained politicization of DOJ actions tied to financial oversight could prompt legislative or institutional responses to shield monetary authorities, or conversely, embolden closer scrutiny of Fed operations. Internationally, allies and markets monitor Fed independence as a signal for U.S. macroeconomic stability; prolonged uncertainty around the chair could have ripple effects on foreign central bank policy coordination and capital flows.
Comparison & Data
| Item | Detail |
|---|---|
| Powell disclosure of probe | Jan. 11, 2026 |
| Trump Oval Office remarks | Feb. 2, 2026 |
| Nominee announced | Kevin Warsh (announced the same day Sen. Tillis declared opposition) |
| Senate Banking Committee | 13 Republicans, 11 Democrats |
| Powell term end | May 2026 |
The table summarizes the critical dates and institutional counts that shape the dispute. The combination of a pending criminal inquiry, an active nomination and a narrowly balanced committee makes outcomes highly sensitive to single lawmakers’ positions and to the pace of investigatory steps such as subpoena compliance.
Reactions & Quotes
“It’s either gross incompetence or it’s theft of some kind, kickbacks. I don’t know what it is,”
President Donald Trump, Feb. 2, 2026 (Oval Office remarks)
Trump made that comment while endorsing Pirro’s continued pursuit of the case and praising her capabilities. His wording framed the renovation controversy as potentially criminal or mismanaged, amplifying partisan attention to the DOJ inquiry.
“The Fed has made its rate-setting decisions based on our best assessment of what will serve the public, rather than following the preferences of the President,”
Jerome Powell (public statement, Jan. 11, 2026)
Powell’s statement responded directly to political pressure over interest-rate policy and framed the investigation as a separate legal matter; it emphasized the Fed’s claim of decision-making independence in the face of White House criticism.
Unconfirmed
- There is no independent confirmation that the Fed’s renovation involved illicit kickbacks; claims of corruption stem from political assertions and remain unproven.
- Details about the scope and timeline of grand jury evidence and whether the Fed will fully comply with all subpoenas have not been publicly verified beyond media reporting.
Bottom Line
The White House’s public support for a DOJ inquiry into a sitting Fed chair, juxtaposed with a pending nomination and a narrowly divided Senate committee, creates an unusual and high-stakes intersection of law, politics and monetary policy. With Powell’s term ending in May, the next three months are likely to determine whether the Fed leadership transition will be orderly or mired in legal and partisan conflict.
Key developments to watch: whether the Fed complies with grand jury subpoenas, whether Sen. Tillis holds his opposition and how other committee Republicans respond, and whether the investigation yields charges before or after a confirmation vote. Each outcome carries implications for Fed independence, the credibility of U.S. institutions and short-term market confidence.