The Department of Justice's criminal investigation into Federal Reserve Chair Jerome Powell has been one of the most closely watched political and economic stories of 2026. Though the DOJ formally closed the probe in April, several signals suggest it could resurface, and we break down what would need to happen for that to occur.
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Powell’s Recent Investigation Timeline
The investigation originated in November 2025, when federal prosecutors began examining whether Powell made false statements to Congress about cost overruns tied to the Federal Reserve's headquarters renovation. The project's estimated cost had grown from roughly $1.9 billion to about $2.5 billion, and Powell testified that the renovation didn’t include luxury features such as a VIP dining room or rooftop gardens.
In March 2026, a federal judge didn’t find evidence that Powell had committed any crime. Weeks later, on April 24, 2026, U.S. Attorney Jeanine Pirro announced she was closing the criminal probe and referring the renovation cost matter to the Federal Reserve's independent Inspector General instead.
Key Factors That the DOJ Could Reopen the Investigation
To make a more precise analysis of what might happen in the Powell case, we have gathered the key factors that could lead the DOJ to open the case.
Inspector General Findings on Renovation Costs
Pirro has said she expects a "comprehensive report" from the Fed's Inspector General and will review its findings once complete. If that report identifies new evidence it could give the DOJ grounds to revisit the case.
Political Pressure
The investigation has a sustained pressure from President Trump, who has repeatedly criticized Powell over interest rate policy.
Pirro's Public Statements
Pirro has been explicit that the door remains open. She reiterated this position in early May, telling reporters the outcome would depend on what the Inspector General's review finds.
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Factors That Could Prevent the DOJ From Reopening the Investigation
On the other hand, there are also several factors pointing to the fact that the Powell case is closed. Here are some of them.
Lack of Evidence for Criminal Conduct
The Fed's Inspector General has reviewed the renovation project twice before and found no wrongdoing. Legal analysts have also noted that criminal false statements to Congress haven’t been proved yet.
Judicial Pushback
The presiding judge in the case already ruled that the original subpoenas lacked a legitimate basis, finding that the goal seems to be pressuring Powell rather than investigating a genuine crime.
Reduced Political Urgency
With Kevin Warsh now confirmed and sworn in as the new Fed Chair in May 2026, the primary political motivation for pressuring Powell, clearing the path for Warsh's confirmation, has largely been resolved. Powell remains on the Fed's Board of Governors until 2028 but no longer holds the chairmanship, which may reduce the administration's urgency to pursue him further.
What Analysts Are Saying
Legal and political observers remain divided. Some point to Pirro's repeated public warnings as a sign that renewed action is likely once the Inspector General's report lands. Others note that the case is weak on evidence and make a second attempt legally risky. Much will depend on the specific findings of the Inspector General's review, which has not yet been publicly released, and on whether the White House continues to view the matter as politically useful now that Warsh is already in place.
How to Trade This Question at Kalshi
On Kalshi, as well as other
prediction market apps, the question of whether the DOJ will reopen the investigation into Powell is trending. Currently, the trend leans toward the view that the Powell case is closed.
| Question | Yes | No |
| Will the DOJ Reopen Its Investigation Into Powell? | 14% | 93% |
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Conclusion - Will the DOJ Reopen Its Investigation Into Powell?
The factors pointing toward closing the Powell case appear to outweigh those suggesting the investigation might be reopened. Given the lack of evidence and the absence of political pressure, the Powell case will likely remain closed. Trading markets seem to align with this assessment. For now, the only remaining steps are the conclusion of the Inspector General's reviews and observing how the situation unfolds by August of this year.
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