Politics
Justice Department drops criminal investigation of Fed chair Powell, likely clearing way for Warsh
WASHINGTON — In a surprising about-face, Jeanine Pirro, the U.S. attorney for the District of Columbia, announced Friday that she would be dropping an investigation into Federal Reserve Chairman Jerome Powell that critics had labeled as politically motivated since it became public in January.
That investigation, which focused on whether Powell had lied to Congress about the $2.5-billion renovation of the central bank’s headquarters, had emerged as a stumbling block in President Trump’s effort to install his pick to succeed Powell.
Sen. Thom Tillis (R-N.C.) had said he would block the nomination of Kevin Warsh to be the next chairman of the Federal Reserve as long as the Powell investigation continued.
While the Justice Department’s investigation is now closed, the bank’s inspector general will take on the investigation into the costly renovations instead, and Pirro did not rule out the possibility of resuming her criminal investigation.
“Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so,” Pirro wrote on X.
White House spokeswoman Karoline Leavitt also told reporters later that Pirro’s announcement did not signal the end of the investigation.
“This has been a priority for the president,” she said.
Tillis did not respond to requests for comment.
Powell was first appointed to the role by Trump in 2017 but fell out of the president’s favor by resisting his pressure campaign to lower interest rates.
The bank has historically enjoyed greater independence than other federal agencies to insulate its decision-making from political influence.
The limits of the bank’s independence are currently being tested by Trump’s attempt last August to fire one of Powell’s colleagues, Federal Reserve Governor Lisa Cook, over allegations that she committed mortgage fraud.
Cook protested her firing and the Supreme Court heard arguments from her and the administration in January. The court’s decision, which has not yet been rendered, could determine whether officials at the bank are more insulated from being fired by the president than officials at other federal agencies.
While Powell didn’t comment on the news that Pirro had dropped her investigation, he said in March that he had “no intention of leaving the Board until the investigation is well and truly over, with transparency and finality.”
The case had already suffered a significant blow in March when James Boasberg, a U.S. district judge for the District of Columbia, quashed subpoenas targeting Powell.
Several former federal prosecutors said Powell is one of several political enemies of the president who have found themselves the targets of criminal investigations into statements they made to Congress, including former CIA Director John Brennan and former FBI Director James Comey.
“The basis for the investigation into Jerome Powell was always suspect in light of President Trump’s public complaints about his refusal to lower interest rates on demand,” said Barbara McQuade, a former U.S. attorney for the Eastern District of Michigan.
The political calculations that seemed to underpin the decision to begin the Powell investigation — and ultimately drop it — marked a significant break from prior precedent, said Greg Brower, a former U.S. attorney for Nevada.
“If you spoke to 100 former U.S. attorneys I don’t think you’d find one who would say that they felt political pressure to bring a case or not bring a case,” he said.
Pirro’s decision could clear the way for Warsh’s nomination to proceed.
Warsh has walked a tightrope at confirmation hearings before the Senate Banking Committee, where he sought to convince senators that he will not be a “sock puppet” for the president and Wall Street, as Donald Trump continues to demand the Fed lower interest rates.
His nomination has been met with scrutiny from Senate Democrats on the committee, who question his close ties to Trump and Wall Street investors.
“The president never once asked me to commit to any particular interest rate decision, period,” Warsh said at a hearing. “Nor would I ever agree to do so if he had.”
Those comments came just hours after Trump, in an interview on CNBC, was asked if he would be disappointed if Warsh didn’t immediately cut rates and responded, “I would.”
A former Fed governor during the financial crisis, Warsh later emerged as a critic of the central bank’s prolonged low interest rate policies and heavy-handed market interventions. He later researched economics at the Hoover Institution, sat on the board of UPS and worked as a private equity consultant.
With a net worth estimated between $135 million and $226 million, Warsh would become the wealthiest Federal Reserve Chairman in history.
If confirmed, he has proposed a “regime change” in Fed policy in favor of pro-growth, market-first approaches.
“Status quo practices and policies are especially harmful when the world is changing this fast,” Warsh told lawmakers at his Senate confirmation hearing this week.
Warsh has signaled an interest in slashing the Fed’s $6.6-trillion balance sheet, which he says has become too “bloated.”
Since the 2008 financial crisis, the Fed has bought trillions of dollars in bonds to prop up the economy and housing markets. But Warsh says that safety net is no longer needed.
He’s proposed the Fed sell off the bulk of its assets and print less money, moves he argues will effectively shift the power to set interest rates to the private market. Critics worry that such a move would destabilize the economy and cause mortgage rates to spike.
“My simple version of this is: Run the printing press a little bit less. Let the balance sheet come down,” he told Fox Business last year.
Michael Gapen, chief U.S. economist at Morgan Stanley, said that a rapid shift in the Fed’s footprint under Warsh is “unlikely.” While reducing reserves is a long-term goal, Gapen said, slashing assets could make the financial system less resilient in periods of economic stress.
“There is no free lunch,” he said.
Since the financial crisis, the Federal Reserve has been involved in predicting the economic future of the U.S. economy. The practice is known as “forward guidance,” a tool the Federal Reserve economists use to communicate their future interest rate intentions.
Warsh wants to do away with forward guidance, but has declined to address how he would approach interest rate decisions if confirmed.
“I don’t believe that I should be previewing for you what a future decision might be,” he said in an exchange with Sen. Chris Van Hollen (D-Md.).
This article includes reporting by the Associated Press.
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Top Trump administration officials, Republican lawmakers and prominent Christian leaders gathered on the National Mall on Sunday for a massive prayer rally celebrating America’s upcoming 250th anniversary.
The event — “Rededicate 250: A National Jubilee of Prayer, Praise & Thanksgiving” — drew thousands for worship music, speeches and prayers focused on reaffirming the United States as “One Nation Under God.”
President Donald Trump, Vice President JD Vance, Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, Director of National Intelligence Tulsi Gabbard and House Speaker Mike Johnson all addressed the gathering, alongside numerous other political and faith figures.
In a prerecorded message, Trump read from 2 Chronicles 7, reciting the well-known Bible verse calling on people to “humble themselves” and seek God.
TRUMP CALLS ON AMERICANS TO PRAY FOR NATION AS 250TH BIRTHDAY APPROACHES: ‘ONE NATION UNDER GOD’
Attendees watch a pre-recorded video of President Donald Trump reading from the Bible during “Rededicate 250” on the National Mall in Washington, DC, on May 17, 2026. (Matthew Hatcher / AFP via Getty Images)
“If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways, then will I hear from heaven, and will forgive their sin, and will heal their land,” Trump said.
Vance described the United States as “a nation of prayer,” saying faith has shaped the country since before its founding.
“In times of suffering and in times of triumph, millions of Americans continue to turn to prayer and their faith in God,” Vance said.
Rubio similarly tied America’s identity to Christianity.
“From the beginning, we have carried the belief that our country represents something new in the world,” Rubio said. “But the soul of our nation has always been rooted in an ancient faith.”
Gabbard urged Americans to humble themselves before God, saying the nation’s founders “knelt” and “asked for God’s mercy” before declaring independence.
FOR 2026, YOU SHOULD MAKE A RESOLUTION TO KNOW THE REVOLUTION
Johnson delivered a prayer of “rededication,” thanking God for guiding the nation since its founding.
“Heavenly Father, we thank you,” Johnson said. “Thank you so much for this great day that you’ve given us here, and we remember that your mighty hand has been upon our nation since the very beginning.”
Hegseth referenced George Washington’s faith, while Sen. Tim Scott, R-S.C., spoke about Christianity’s role in shaping the nation and argued prayer was central to the Civil Rights Movement.
Alveda King, niece of Martin Luther King Jr., praised Trump for encouraging Americans to “rededicate America to God.”
“This nation was founded on godly principles,” Alveda King told Fox News, adding that Martin Luther King Jr., “spoke to a crowd like this in 1963.”
Actor Jonathan Roumie, who portrays Jesus in “The Chosen,” also spoke at the event, encouraging Americans to recommit themselves to faith and prayer.
NEARLY 500 PUBLIC FIGURES FROM POLITICS TO HOLLYWOOD WILL READ BIBLE COVER TO COVER TO MARK AMERICA’S 250TH
House Speaker Mike Johnson delivers a prayer during “Rededicate 250” on the National Mall in Washington, D.C., on May 17, 2026. (Matthew Hatcher/AFP)
The event also featured appearances from Cardinal Timothy Dolan, Bishop Robert Barron, Rabbi Meir Soloveichik, evangelist Franklin Graham, along with performances from Grammy-winning Christian artist Chris Tomlin, among others.
Many attendees wore patriotic colors as they packed the National Mall.
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Freedom 250, the nonprofit behind the event, said the gathering is part of a broader effort leading up to America’s semiquincentennial celebration on July 4, 2026.
Fox News Digital’s Stephen Sorace and The Associated Press contributed to this report.
HONG KONG — As President Trump left Beijing on Friday, Chinese social media resurfaced a familiar nickname for the president — flattering at first glance — declaring that Chuan Jianguo, the “Nation Builder,” had returned.
It was not meant as a compliment. The nation he is building, according to the Chinese, is not the United States but their own, through a series of inadvertent yet costly mistakes inflicted by Trump at home and abroad.
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If the Chinese government was self-assured entering Trump’s summit with Xi Jinping, then the results of the state visit, in which Beijing refused to offer Trump any meaningful deals or concessions, signal their unmistakable confidence in American decline.
Chinese government statements in local media stating as much made their way back to Trump as he was departing, aggravating the president, a U.S. official said. But the White House secured a clarification from the Chinese that seemed to placate Trump. America was only declining under President Biden, they said — not anymore.
President Trump and President Xi Jinping tour Zhongnanhai Garden on Friday in Beijing.
(Evan Vucci / Pool via Getty Images)
The Trump administration argues the trip was a success, having secured the display of conciliation and partnership the president had sought after years of increasingly dangerous acrimony.
Foreign policy hawks on China will be displeased with his new direction of friendship and cooperation with a government they view as openly hostile to the United States. But Trump seems to have reached a similar conclusion as past administrations, that China might require a relationship in pursuit of, as Xi put it, “constructive strategic stability.”
Trump was notably out of character throughout his stay here, deferential to his host, marveling at displays of Chinese power and reticent to speak with the press.
Five times over two days, Trump referred to Xi as his friend, taking every public opportunity to offer his compliments and pats on the back. None of it was reciprocated. The Chinese leader, Trump told Fox News in an interview, was “all business” in private, as well, apparently uninterested in his overtures of personal goodwill.
Presidents Xi and Trump tour Zhongnanhai Garden on Friday.
(Evan Vucci—Pool/Getty Images)
The summit may ultimately be remembered as the moment when Trump recognized a shifting power dynamic, where an American president had the rare and uncomfortable experience of entering a meeting clearly overmatched.
“I think the most important thing is relationship,” Trump said in the interview, describing the summit as “historic.”
“It’s all about relationship,” he added. “I have a very good relationship with President Xi.”
Taiwan was discussed ‘the whole night’
Little of substance was accomplished over two days of talks. But Chinese officials expected no less after warning Trump’s team before the summit that its minimal preparation had failed to lay the groundwork for diplomatic agreements.
Still, the lack of breakthroughs may come as a relief to some in Washington. Trump appears to have held to a long-standing U.S. line on Taiwan, for now, refusing to provide Xi with clarity on whether the United States would defend the self-ruled island if China tries to reclaim it by force.
The two men discussed the matter “the whole night,” Trump told Fox.
If China attacked, “they would be met harshly, and bad things will happen,” Trump said. Yet within the same answer, he questioned Taiwan’s “odds” against China if war were to break out, even with U.S. help, noting its proximity to the Chinese mainland and its vast distance away from the United States.
Whether Trump will proceed with arms sales to Taiwan — passed by Congress and obligated by law under the Taiwan Relations Act — is still an open question.
“If you kept it the way it is, I think China is going to be OK with that,” Trump said, referencing an ambiguous status quo around Taiwan’s status, “but we’re not looking to have somebody say, ‘Let’s go independent because the United States is backing us.’ ”
“Taiwan would be very smart to cool it a little bit,” he added. “China would be smart to cool it a little bit. They ought to both cool it.”
President Trump departs as President Xi looks on after a visit to Zhongnanhai Garden on Friday.
(Evan Vucci/ Pool via Getty Images)
Curious company
Trump’s choice of company in the U.S. delegation left the Chinese with questions over the purpose of the trip.
Lara Trump, a Fox News host and the president’s daughter-in-law, attended alongside her husband, Eric Trump, whose presence as a private citizen running the Trump Organization was a direct appeal to Beijing to treat the administration like a family business. Brett Ratner, director of the “Rush Hour” series and a documentary on the first lady that bombed at the box office, was given prime placement along with America’s top business leaders.
The last time a secretary of Defense attended a presidential state visit to China was on Richard Nixon’s famous trip in 1972. Chinese officials were unsure what to make of Pete Hegseth’s presence — whether it was meant to convey a softer stance, a hardening one, or simply an ignorance of basic diplomatic protocol.
Trump said he felt personally honored by the lavish welcome he received on the edge of Tiananmen Square, outside the Great Hall of the People, where China hosts all visiting dignitaries.
Before a lunch at Zhongnanhai, the secretive headquarters of the Chinese Communist Party, Trump asked Xi if he was special for getting to visit the compound. He was the fourth U.S. president to do so.
While the Trump administration offered itself glowing reviews of the outcome of the summit, the Chinese government offered little to say as he departed. And Chinese media highlighted Beijing’s resolute stance on American priorities — from trade to the Iran war — as evidence of Chinese confidence and American decline.
But all that business wasn’t the point of the trip, Trump told Fox’s Bret Baier. For the president, it was all personal.
“I want to thank President Xi, my friend, for this magnificent welcome,” Trump said in his toast at the state banquet, repeating the personal overture. “The American and Chinese people share much in common. We value hard work. We value courage and achievement. We love our families and we love our countries.
“Together, we have the chance to draw on these values to create a future of greater prosperity, cooperation and happiness and peace for our children,” Trump added. “We love our children. This region and the world — it’s a special world, with the two of us united and together.”
new video loaded: Cassidy Loses Primary After Drawing Trump’s Ire
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transcript
Cassidy Loses Primary After Drawing Trump’s Ire
Republican Senator Bill Cassidy lost his Louisiana primary on Saturday after President Trump targeted him for voting to impeach him in 2021. The two-term senator took veiled swipes at the president in his concession speech.
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Thank you, Louisiana! I want to say thank you to a very special man who you all know, the best president this country has ever had, President Donald Trump. I’ve been able to participate in democracy. And when you participate in democracy, sometimes it doesn’t turn out the way you want it to. But you don’t pout. You don’t whine. You don’t claim the election was stolen. Our country is not about one individual. It is about the welfare of all Americans, and it is about our Constitution. And if someone doesn’t understand that and attempts to control others through using the levers of power, they are about serving themselves. They’re not about serving us.”
By Cynthia Silva
May 17, 2026
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