The Justice Department’s criminal probe into the Federal Reserve and its chair, Jerome Powell, closed without charges after months of political pressure from the Trump administration. President Trump’s July visit to the Fed’s Washington headquarters and repeated calls for lower rates have left a credibility gap. With Powell’s term ending May 15, the administration is poised to install Kevin M. Warsh as his successor.

U.S. Attorney Jeanine Pirro announced the inquiry was being transferred to the Fed’s inspector general, adding she would not hesitate to revive it if warranted. White House press secretary Karoline Leavitt countered that the investigation “continues” under a different authority. Legal scholars warn the episode erodes the norm that central bankers can pursue policy without fear of retaliation.

Senate Banking Committee Republican Thom Tillis has tied his vote on any Fed nominee to the probe’s resolution, threatening to block Warsh until charges are dropped. Powell has said he will remain chair until a successor is confirmed, preserving his voting power through January 2028. The episode has already nudged policymakers toward more cautious rate moves, underscoring the Fed’s fragile independence.