A federal judge in a sharp ruling blocked a subpoena issued to the Federal Reserve by a grand jury as part of a criminal investigation into Chair Jerome Powell.
U.S. Attorney for the District of Columbia Jeanine Pirro said shortly after it was unsealed on Friday that the Justice Department would appeal the decision, which she called an “outrageous” decision.
Friday’s action will likely keep Powell in the chairman’s seat longer than Senator Thom Tillis, R-N.C. has vowed to block the confirmation of Kevin Wersh as Powell’s successor until the federal investigation is concluded.
This could mean that interest rates will remain higher than President Donald Trump wants for a longer period of time because Powell has refused to bow to the President’s demands to lower them further.
U.S. District Judge James Boasberg said in his ruling that evidence showed Pirro was motivated to investigate Powell because of the Fed chief’s desire to bow to Trump and cut interest rates quickly and broadly.
Pirro’s investigation reportedly focuses on the Fed’s multibillion-dollar renovation of its headquarters in Washington and Powell’s testimony to the Senate Banking Committee about that project.
“Did prosecutors issue those subpoenas for a proper purpose? The Court finds that they did not,” Boasberg wrote in the ruling in the U.S. District Court in Washington.
The judge wrote, “There is abundant evidence that the principal (if not the sole) purpose of the subpoena is to harass and pressure Powell either to yield to the President or to resign and make way for the Fed Chairman.”
“On the other side of the scale, the government has provided no evidence that Powell committed any crime other than annoying the President,” Boasberg wrote.
Pirro criticized Boasberg’s decision at a news conference on Friday, calling it “disgraceful”.
“Jerome Powell is now bathed in immunity,” he said angrily. “This is wrong, and it is without legal authority.”
Tillis, in a post on x On Friday, predictions were made that the decision would stand.
He said, “This decision confirms how weak and frivolous the criminal investigation of Chairman Powell is and is nothing more than a failed attack on the Fed’s independence.” “We all know how this will end and the DCUS Attorney’s Office should save itself further embarrassment.”
The Federal Reserve declined to comment when contacted by CNBC.
Boasberg’s decision and the DOJ’s planned appeal are likely to keep Powell in his seat as Fed chair until his term ends in May.
Tillis promised to vote “no” on the Banking Committee moving forward on Warsh’s nomination, which would deadlock that panel, preventing Warsh from receiving a confirmation vote by the full Senate.
Trump’s desire for the Fed to cut interest rates further is further complicated by the Iran war.
Rising energy costs may discourage policymakers from funding relief until there is more clarity about when and how the war will end.
Federal Reserve Chairman Jerome Powell speaks during a news conference after the Federal Open Market Committee meeting at the Federal Reserve in Washington on October 29, 2025.
Alex Wong | Getty Images News | getty images
Recent statements from Fed officials have indicated a mostly cautious stance on further cuts, with the exception of Governors Stephen Miron and Christopher Waller, who have supported lower rates.
The market had already pushed back any hopes of a rate cut by the end of the year. Before the war, the market was pricing in at least two cuts.
– CNBC Eamon Javers And jeff cox Contributed to this article