DOJ drops criminal investigation into Fed Chair Powell: the Warsh appointment track is fully unblocked, and U.S. Treasury yields immediately fall

The U.S. Department of Justice’s prosecutor for the District of Columbia, Jeanine Pirro, announced on 4/24 on the X platform that she has officially closed the criminal investigation into Fed Chair Jerome Powell and has turned the issue of cost overruns in the subsequent Federal Reserve headquarters renovation project over to the Fed Inspector General for handling. This move directly removes the confirmation obstacle for Fed chair nominee Warsh in the Senate—Republican Senator Thom Tillis previously postponed the Warsh appointment vote on the grounds that the “Powell investigation has not been withdrawn.” According to CNBC, the market reacted immediately: the 10-year U.S. Treasury yield fell to 4.306%, and the 2-year yield fell by more than 4 basis points to 3.78%.

Event timeline

Date Event Early 2025–2026 Trump administration launches a criminal investigation into Powell over cost overruns on the Fed headquarters renovation project In early April 2026 Trump nominates Warsh to replace Powell; Senator Thom Tillis states: he will block Warsh’s confirmation unless the Powell investigation is withdrawn On April 21 Warsh appears before the Senate Banking Committee hearing; denies that he would become a Trump “sock puppet” On April 22 Warsh files his financial disclosures of $135–$226 million, including holdings in crypto/AI startups such as SpaceX and Polymarket On April 24 Pirro declares on the X platform that the DOJ withdraws the case, handing the follow-up investigation to the Fed Inspector General; the 10-year U.S. Treasury yield falls to 4.306%

Pirro’s conditional withdrawal

In the announcement, Pirro leaves no doubt about her underlying intent: the DOJ’s withdrawal this time is a “stage-by-stage arrangement to transfer the matter to the Fed Inspector General,” not a comprehensive closure. She specifically emphasized that after the Inspector General completes the internal investigation, the DOJ will review the results and retains the right to “restart the criminal investigation if the facts require it.”

Political implications: Warsh’s appointment can move forward, but the DOJ still holds a tool it can use to restart a probe at any time. Democratic Senator Elizabeth Warren and Dick Durbin immediately issued a joint public letter questioning the timing and motivation behind Pirro’s move.

Immediate market reaction

After the news broke, U.S. Treasury yields fell right away, reflecting the market’s repricing of relief from lower uncertainty about “a transition in the Fed chair”:

The 10-year U.S. Treasury yield fell by more than 1 basis point to 4.306%

The 2-year U.S. Treasury yield fell by more than 4 basis points to 3.78% (more directly reflecting expectations for short-term interest-rate policy)

The S&P 500 and Nasdaq hit new highs that day, and some market participants interpreted Warsh as a relatively dovish Fed pick

Powell’s next step

Powell’s term runs until May 2026. After the DOJ withdrew the case, whether Powell will remain as a Fed governor after the end of his Fed chair term (his governor term runs until 2028) has become a new focus for the market. A CNBC commentary citing sources described that Powell personally faces a “major decision”—if he chooses to step down, it would give Trump an additional opportunity to nominate someone to the Fed board.

A structural signal: a gray area around Fed independence

This event highlights an issue that has been rising in recent years: how Fed political independence is maintained between “the president’s active nomination” and “judicial investigation tools.” Even though this investigation has been withdrawn, concerns that the executive branch may continue to pressure the Fed using investigation tools have not been completely erased. The Fed’s first Federal Open Market Committee (FOMC) meeting after Warsh takes office will be the first concrete checkpoint to validate those worries.

This article, DOJ withdraws the criminal investigation into Fed Chair Powell: the Warsh appointment path is fully cleared, and U.S. Treasury yields fall immediately, first appeared on Chain News ABMedia.