WASHINGTON — Federal Reserve Chair Jerome Powell won a major court victory Friday after Chief U.S. District Judge James Boasberg quashed Justice Department subpoenas tied to a criminal probe of the Fed’s headquarters renovation, March 13. In a 27-page memorandum opinion, Boasberg said prosecutors had offered “essentially zero evidence” of a crime and found the subpoenas were a pretext to pressure the central bank over interest-rate policy.
The ruling blocks prosecutors, at least for now, from forcing the Federal Reserve Board to hand over records tied to the renovation project and Powell’s 2025 Senate testimony about it. Boasberg wrote that the government had “no evidence whatsoever” that Powell committed a crime other than “displeasing the President,” a blunt rebuke that strengthens Powell’s argument that the dispute is as much about the Fed’s independence as it is about construction costs.
The Justice Department is not backing down. Prosecutors plan to appeal, according to Reuters’ report on the ruling. The fight is also complicating Senate consideration of Kevin Warsh, President Donald Trump’s choice to succeed Powell when Powell’s term as chair expires in mid-May, according to AP’s coverage of the decision.
Why Jerome Powell’s court win matters for Fed independence
The case matters beyond one renovation dispute because Boasberg framed it as a test of whether criminal process can be used to bend an independent central bank to political will. Powell made the same point in a Jan. 11 statement disclosing the subpoenas, saying the threatened indictment was a “pretext” and warning that monetary policy must be set by economic evidence, not intimidation.
That argument gained weight because the Fed has publicly laid out its explanation for the project. In the central bank’s renovation FAQ, the Board says the overhaul is meant to modernize two historic buildings, consolidate operations and reduce costs over time, while attributing overruns to design changes, higher labor and materials prices, and unforeseen conditions including asbestos, contaminated soil and a higher-than-expected water table.
None of that ends the political fight. Critics can still argue the project was mishandled, and the appeal means the legal battle is not over. But Friday’s ruling sharply raises the burden on prosecutors by declaring that suspicion alone, without evidence to support it, is not enough to justify sweeping subpoenas against the Federal Reserve.
How the Jerome Powell probe escalated
The ruling capped months of steadily rising pressure. In June 2025 Senate testimony, Powell said reports portraying the renovation as lavish were “misleading and inaccurate,” while acknowledging cost overruns. A month later, he and Trump sparred in person during a tour of the project after Trump cited a higher price tag that Powell said improperly folded in a third building completed years earlier.
By January, the conflict had turned openly legal. Reuters reported at the time that Powell accused the administration of using threatened criminal charges to gain leverage over interest-rate decisions, a remarkable public escalation from a Fed chair who had already spent months defending the renovation on policy and oversight grounds.
For now, Powell has his clearest legal win yet. The appeal could revive the dispute, but Boasberg’s opinion gives the Fed chair a powerful defense at a moment when the White House, Congress and financial markets are all weighing how much independence the central bank will actually be allowed to keep.
