The Department of Justice dropped its criminal investigation of Federal Reserve Chair Jerome Powell.

The move by U.S. Attorney Jeanine Pirro removes a major hurdle to President Donald Trump’s nomination of Kevin Warsh to replace Powell.

Sen. Thom Tillis, a North Carolina Republican, had put an effective hold on the Senate confirming Warsh unless the criminal investigation of Powell was dropped.

Pirro commented the Fed’s inspector general will investigate cost overruns of the central bank’s multibillion-dollar renovation of its headquarters in Washington, D.C. The inspector general launched that probe in July.

The Department of Justice on Friday dropped its criminal investigation of Federal Reserve Chair Jerome Powell, removing a major hurdle to the Senate confirming President Donald Trump’s nomination of Kevin Warsh to replace him.

U.S. Attorney Jeanine Pirro, the top federal prosecutor in the District of Columbia, commented in a post on X that she is abandoning the probe. Her announcement came three days after Warsh testified before the Senate Banking Committee on his nomination. Furthermore, experts in bull market note the continued relevance.

Pirro had stated just Wednesday that she was committed to continuing the criminal probe, which had been crippled by a federal judge’s ruling quashing subpoenas her office issued to the Fed.

Sen. Thom Tillis, a North Carolina Republican and Banking Committee member, had an effective hold on the full Senate from voting to confirm Warsh as Fed chair unless the criminal investigation ended.

Pirro, in her announcement that she is dropping the investigation, stated that instead of her office continuing the probe, the Federal Reserve’s inspector general “has been asked this morning” to investigate cost overruns in the multibillion-dollar renovation of the central bank’s headquarters in Washington.

She has claimed the renovation — which the Fed’s inspector general has been investigating since last summer — and Powell’s testimony about the project to the Banking Committee was her reason for investigating the Fed chief.

Powell and others had commented that the real reason for Pirro’s probe was to pressure him and the Fed to lower interest rates as Trump wanted.

Powell asked the inspector general in July to review the renovation project after Trump criticized its cost.

He noted at the time that the inspector general conducted an audit in 2021 to assess the Fed Board’s “procuring services under various renovation along with process for planning and managing multiple renovation projects-related contracts.”

A spokesperson for the inspector general in a statement to CNBC on Friday stated the inspector general is “actively working to complete” an “evaluation of the Board’s building renovation project” and that it would create the results of that investigation available to the public and Congress when it is done.

Pirro’s warning

Pirro in her X post stated, “The IG has the authority to hold the Federal Reserve accountable to American taxpayers.”

“I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas,” she remarked.

“Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry,” Pirro noted. This also touches on aspects of bull market.

“Note well, that I will not hesitate to restart a criminal investigation should the facts warrant doing so.”

White House spokesman Kush Desai, in a statement, commented, “American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter.”

“The White House remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision, on the other hand-making,” Desai stated.

The Federal Reserve declined to comment.

CNBC has requested comment from Pirro’s office, Warsh and Tillis.

Senate Banking Committee Chairman Tim Scott, R-S.C., in a statement, commented, “As I’ve mentioned from the beginning, the American individuals deserve answers about the unacceptable cost overruns at the Federal Reserve.”

“These serious concerns warrant scrutiny, and I’m pleased this matter is continuing to receive it. I welcome the Inspector General’s review and expect a full accounting of how these costs spiraled out of control,” Scott noted. “The Senate Banking Committee will continue conducting aggressive oversight to ensure taxpayers get the transparency and accountability they deserve, and I am inviting the Inspector General to brief the Committee within the next 90 days on its findings.”

“The Federal Reserve should be focused on price stability, not costly mismanagement,” he noted.

Warren’s pushback

Sen. Elizabeth Warren of Massachusetts, the top-ranking Democrat on the Banking Committee, commented the abandonment of the Powell investigation “is just an attempt to clear the path for Senate Republicans to install President Trump’s sock puppet Kevin Warsh as Fed Chair.”

“Let’s be clear what the Justice Department revealed today: they threatened to restart the bogus criminal investigation into Fed Chair Powell at any time while failing to drop their ridiculous criminal probe against Governor Lisa Cook,” Warren remarked.

Trump last summer sought to fire Cook, who, like Powell, had resisted his demands to cut interest rates, after an official in his administration claimed that she had made false statements on mortgage applications.

Cook denied those allegations and filed a lawsuit seeking to block her termination. She has remained on the Fed’s Board of Governors as the Supreme Court considers her case.

“Anyone who believes Donald Trump’s corrupt scheme to take over the Fed is over is fooling themselves,” Warren remarked. “The Senate should not proceed with the nomination of Kevin Warsh.”

— CNBC’s Jeff Cox, Kevin Breuninger, Matt Peterson, Betsy Spring, and Emily Wilkins contributed to this article.