Report: U.S. Judge Rejects Trump Administration's Request to Reinstate Subpoena Against Powell

An investigation by the U.S. Justice Department into cost overruns at the Federal Reserve headquarters' renovation project has been stymied.

On Friday, a U.S. federal judge upheld his prior ruling, refusing the Justice Department’s request to reconsider his decision targeting Federal Reserve Chairman Powell. In a scathing, six-page opinion, the judge rejected arguments from the Trump administration. Previously, the judge had ruled to quash two subpoenas issued to the Federal Reserve.

The ruling is the latest development in a legal battle between the Federal Reserve's independence and the investigative powers of the U.S. Justice Department.

U.S. District Court Judge James Boasberg stated that the Trump administration had neither provided new evidence nor pointed out any substantive errors in his March ruling. That ruling determined that the subpoenas were issued improperly during U.S. Attorney Jeanine Pirro's investigation into Fed Chairman Powell. "The government’s arguments are far from persuasive enough to convince this Court to reach a different conclusion."

Pirro announced immediately after the ruling that she would appeal and filed a motion last month asking Boasberg to reconsider. Prosecutors in her office argued that Boasberg applied the wrong legal standard and improperly limited their ability to obtain evidence of criminal wrongdoing. However, Boasberg stated on Friday that the Trump administration had overlooked the core point of his initial ruling: that subpoena power does not extend to investigating someone for improper purposes.

In his initial ruling, Boasberg determined that the subpoenas were intended to pressure Powell to lower interest rates or resign, in the context of Trump's months-long demands for rate cuts, rather than to advance a legitimate criminal investigation.

A spokesperson for Pirro stated: "We will vigorously appeal the judiciary’s interference in our ability to obtain grand jury information."

The well-known financial journalist, known as the "Fed Whisperer," Nick Timiraos, stated that this ruling clears the way for Pirro to appeal to a higher court. However, the appeal could delay the confirmation of former Fed Governor Kevin Warsh. Warsh is the person Trump nominated to replace Powell. Powell's term as Fed Chair expires next month.

Republican Senator Thom Tillis of North Carolina has previously stated that he would not advance any Federal Reserve personnel nominations until the related investigation concluded, which would prevent Republicans from securing the votes needed in the Senate Banking Committee to approve Warsh.

Powell and the Federal Reserve have characterized this investigation as political retaliation, stemming from the Fed's refusal to adjust interest rate policies according to Trump's wishes. In court documents released by the Federal Reserve on March 26, it stated: "For years, the President has continuously pressured Chairman Powell to force interest rates lower and has directed prosecutors to harass political opponents during his second term."