DOJ Drops Probe into Powell, But Damage to Central Bank Independence Already Done

The Department of Justice has officially closed its investigation into former Federal Reserve chair Jay Powell, citing a lack of evidence to support claims of administrative misconduct or criminal wrongdoing.

The probe was sparked by a multi-billion-dollar renovation project at the central bank's headquarters on Constitution Avenue, which critics labeled as an extravagant waste of public funds. However, when independent internal watchdogs and the Federal Reserve's inspector general investigated the project, they found no evidence to support claims of corruption or malfeasance.

The final inspector general report released in late 2026 concluded that while there were bureaucratic inefficiencies and management oversights in handling the construction effort, there was no evidence of criminal intent or financial corruption by Powell.

Despite the lack of evidence, the investigation had already done significant damage to institutional norms, threatening the credibility of central banks. Central banks rely entirely on their independence and credibility to set monetary policy without political interference.