US judge upholds block on subpoenas to Fed’s Jerome Powell, teeing up likely appeal

WASHINGTON - A US judge on April 3 stood by his prior decision to block subpoenas issued in a criminal investigation into Federal Reserve chairman Jerome Powell, setting up a likely appeal that could further delay President Donald Trump’s move to install a more compliant central bank head.

Chief US District Judge James Boasberg, of the District of Columbia, rejected the Justice Department’s bid to reconsider his earlier ruling, which had effectively halted the criminal probe into Mr Powell.

Boasberg in a March 13 ruling determined that subpoenas to the Fed’s Board of Governors in January were issued for the improper purpose of pressuring Mr Powell to accede to Mr Trump’s demands to rapidly lower interest rates or resign.

The subpoenas, issued by Washington DC’s top federal prosecutor Jeanine Pirro, a stalwart Trump ally, sought information about cost overruns in renovations at the Fed’s headquarters and Mr Powell’s testimony to Congress in 2025 about the project.

The ruling is Mr Powell’s latest victory in his battle with Ms Pirro’s office about the investigation, which he has called a pretext for Mr Trump to gain more influence over the Fed and monetary policy.

Ms Pirro has vowed to continue the probe and said her office is prepared to appeal to the US Court of Appeals for the DC Circuit.

Justice Department leadership has backed the decision to appeal, according to a source familiar with the matter.

The appeal could delay confirmation of Mr Kevin Warsh, Mr Trump’s pick to succeed Mr Powell as Fed chair.

Senator Thom Tillis, a Republican member of the Senate Banking Committee who has criticised the probe into Mr Powell, has vowed to continue blocking Mr Warsh’s nomination while any appeal plays out.

Mr Powell has pledged not to leave the central bank until the probe is over.

Prosecutors have said they are investigating Mr Powell for potential fraud charges and false statements to a congressional committee. But a top lawyer in Ms Pirro’s office acknowledged in court on March 3 that prosecutors do not currently know what evidence exists that Mr Powell committed a crime, according to a court transcript.

Ms Pirro’s office faced a high legal bar to convince Judge Boasberg to reverse his earlier decision, having to show that either new evidence emerged or the judge made a clear legal error.

Justice Department lawyers argued that Judge Boasberg set too high a standard for prosecutors to meet at the early stages of an investigation and misinterpreted the timeline of the probe.

Lawyers for the Fed’s Board of Governors argued that Judge Boasberg’s initial ruling was backed by “overwhelming evidence.” REUTERS