The Justice Department has closed its criminal investigation of Federal Reserve Chair Jerome Powell, a move that removes the most significant obstacle blocking the Senate from confirming Kevin Warsh as Powells successor — and hands Senate Banking Committee Chairman Tim Scott of South Carolina a cleaner path to one of the most consequential confirmation votes of the current Congress.
U.S. Attorney Jeanine Pirro announced Friday that she was halting her offices probe, which had centered on testimony Powell gave to the Senate Banking Committee last June about cost overruns on the Feds multimillion-dollar Washington headquarters renovation. Pirro directed the Feds inspector general to conduct a full review of the underlying construction expenses, saying she expects a thorough report in short order and is confident the outcome will help resolve the questions that led her office to issue subpoenas.
The announcement came three days after Warsh appeared before Scotts Banking Committee for his confirmation hearing on April 21 — a session Scott opened by stressing how the Feds policy decisions touch everything from grocery bills to mortgage payments for working Americans.
Scotts Role at the Center of the Process
As chairman of the Senate Banking, Housing, and Urban Affairs Committee, Scott holds more direct authority over the Warsh nomination than virtually any other senator. He schedules hearings, manages the committee vote, and controls when the nomination advances to the full Senate floor.
Scott, the Spartanburg-born senator who ran for president in 2024, has been publicly consistent on a central point: the Fed must remain free from political pressure. In remarks ahead of the April 21 hearing, Scott emphasized the importance of the central banks independence and said Fed members must steer clear of political winds when making monetary policy decisions. He also told reporters before the hearing that Warsh would restore an independent Fed, arguing the institutions separation from executive-branch politics had eroded during the prior administration.
Those statements put Scott in a careful position. His argument is not that the executive branch should direct interest-rate policy — exactly the opposite. He framed Warsh as the candidate who would reinforce, rather than undermine, the Feds traditional independence from White House pressure.
Before scheduling the Warsh hearing, Scott had acknowledged publicly that Sen. Thom Tillis, a North Carolina Republican, wanted the Justice Departments Powell investigation resolved before the committee moved forward. Scott said he believed the two matters were converging toward resolution. The DOJs Friday announcement appears to vindicate that prediction, though Pirros language — noting that the inspector generals findings could still inform future decisions — leaves some ambiguity about whether the matter is fully closed.
What Happened and Why It Matters
Pirros investigation stemmed partly from a perjury referral related to what Powell told lawmakers about the Feds headquarters renovation project, which has faced scrutiny from the inspector general since last summer. Powell and others close to the situation have maintained the investigation was driven less by legal substance and more by political pressure aimed at pushing the Fed toward lower interest rates ahead of the 2026 election cycle.
With the investigation formally closed — at least at the Justice Department level — Tillis signaled during the April 21 hearing that he was prepared to support Warsh once the legal cloud lifted. The Banking Committee had not yet scheduled a vote as of Friday, and the Senate is expected to recess the week of May 4, meaning the earliest floor vote on Warsh could come during the week of May 11 — just days before Powells term expires on May 15.
Warsh, 56, a Stanford and Harvard Law graduate who served on the Feds Board of Governors from 2006 to 2011 and was unanimously confirmed then, testified that Trump had never once directed him toward any specific interest-rate decision. He said he would be an independent actor if confirmed as chair. Warsh also told the committee that one of his top priorities would be reining in inflation, which currently runs at an annual rate of 3.3 percent.
Spartanburg Banking and Small Business Implications
For Spartanburg Countys banking sector, leadership at the Federal Reserve carries real consequences. Truist Bank — which carries the legacy of BB&Ts deep Carolinas presence — operates multiple branches in Spartanburg and is one of the primary small-business lenders in the Upstate. First National Bank of Pennsylvania, which expanded into Spartanburg County in recent years, also competes actively for commercial and small-business loan customers in the market.
The Feds benchmark interest rate determines the cost of capital throughout the banking system. Since the Feds rate-tightening cycle that began in 2022, small-business borrowing costs in Spartanburg County — as elsewhere — have remained elevated. Local business owners watching the Warsh confirmation process are effectively watching a decision that will influence whether the Fed moves rates lower, holds them steady, or responds to inflation pressures with further tightening.
Warsh signaled during his confirmation hearing that he intends to use a broader set of tools — including balance-sheet policy — alongside interest rates. He has also criticized the Fed for expanding its mandate beyond core monetary policy into areas like climate and social equity, a posture that aligns with the deregulatory instincts of many Upstate South Carolina business owners.
Rep. William Timmons, whose SC-4 district covers Spartanburg, sits on the House Financial Services Committee and has a direct stake in how Fed governance unfolds. Any changes to bank regulation or monetary policy signaled by a new Fed chair will flow through that committees jurisdiction before reaching the institutions that serve Spartanburg businesses and families.
Powells term runs through May 15. Barring a procedural delay, Warshs confirmation vote — once it reaches the Senate floor — is expected to pass on a simple majority.
