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.
The Tennessee General Assembly wrapped up its annual session this week, with the Republican supermajority signing off on a slate of bills codifying some of the party’s priorities on education and other issues.
Lawmakers expanded the number of school vouchers. They established new state power over the Memphis-area school district, and they put in place additional oversight of the state’s largest airport authorities.
But a central focus of the legislature’s work this year was undocumented immigrants.
Ahead of this year’s legislative session, Republican leaders worked closely with Stephen Miller, a top White House adviser, to craft another round of bills that are viewed as a way to enforce President Trump’s immigration crackdown at the state level.
Gov. Bill Lee, a Republican, has already signed some of the bills, which will go into effect on July 1. He is widely expected to sign the others.
Here’s what some of those bills aim to do.
Driving tests would have an English language requirement.
Despite pushback from Democrats and several immigrant organizations, tests for a drivers license will now effectively have an English language requirement.
If an applicant does not speak English, the person can still take the initial written exam in another language. But the applicant will be able to receive only a nonrenewable, restricted license that expires after 18 months. At the end of that period, the driver will have to take a written exam in English to obtain a permanent license.
Government employees could face jail time for failing to report undocumented immigrants who receive public benefits.
Under a bill approved this month, local and state employees would be required to report to the state, including the General Assembly, instances in which any undocumented person receives services at public hospitals or government social service agencies.
State and local agencies, including health-related ones, are mandated to maintain copies of documentation verifying citizenship, such as a drivers license or passport. They would also be required to report undocumented immigrants to a centralized immigration authority established last year.
Mr. Miller and other Republicans have scrutinized fraud and waste across the country, and targeted undocumented immigrants as part of that campaign.
Local governments could lose state funds for failing to verify immigration status for employees.
State and local government agencies are already required to verify whether a prospective employee is a U.S. citizen or has authorization to work in the United States. Another bill, recently signed into law by Mr. Lee, adds the threat of withholding funding if a government entity is found to have violated that process.
Failure to comply with a final deportation order could lead to jail time or a fine.
Some states have sought to criminalize certain violations of immigration law, and Tennessee is joining that push. Mr. Lee signed a law that makes it a misdemeanor if an immigrant facing an order of removal fails to leave Tennessee within 90 days, or if an undocumented immigrant has entered the state while facing a deportation order. Similar efforts have encountered legal challenges, including in Iowa under the Biden administration.
Tennessee sheriffs will have to cooperate with federal immigration forces.
Under one bill, all Tennessee sheriffs would have to enter into formal cooperation agreements with Immigration and Customs Enforcement.
If they did not by Jan. 1, they would risk losing state funding.
Politics
Parents in Bronx neighborhood plead for NYPD guard as Mamdani cuts cops, halts hires: ‘Horrible situation’
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FIRST ON FOX: NEW YORK — As New York City Mayor Zohran Mamdani moves to cut the NYPD’s budget and resists calls to hire more police officers, parents in The Bronx are asking for more police, not less, saying their kids face an increase in danger.
The push highlights growing tension between the mayor’s policing agenda and safety concerns from local families.
Over 1,000 people have signed a Change.org petition supporting the families of Zeta Bronx Tremont Park Lower Elementary school, who are requesting an NYPD crossing guard to be assigned to a treacherous corner, where they say a tragic accident is waiting to happen.
Fox News Digital went to the busy intersection at Arthur Avenue and Tremont Avenue and spoke to parents about the dangers their children face every day as cars zoom by on their way to Interstate 95.
“The situation is very horrible for the kids and the parents too,” Aimee, a parent at the school, said. “There have always been small accidents on the street because the intersection crosses to go right to the highway, and it’s something that worries us a lot. They don’t take us into consideration and I feel that we should raise our voice for the entire community of the school.”
MAMDANI MOVES TO SIDELINE NYC POLICE WITH NEW SAFETY OFFICE UNDER SWEEPING OVERHAUL
Mayor Zohran Mamdani speaks during an event. (Getty Images)
A parent named Christine explained that the school has been trying to get a crossing guard or police officer “for a long time” but were told “they didn’t have anyone.” Several NYPD vehicles could be seen parked near the intersection but were unoccupied, and parents told Fox News Digital they belonged to a nearby station and were not monitoring the street crossing.
“[There have] almost been accidents so many times, and we really need help,” Christine said.
Fox News Digital reached out to Mayor Mamdani’s office for comment but did not receive a response.
Mamdani has faced criticism over his relationship with police dating back to his mayoral campaign, which was dogged by questions about his past support of defunding the police. After his election, Mamdani was in the hot seat from critics again when his budget included cutting police funding and cancelling 5,000 new NYPD hires.
Some parents near the Bronx school, including some who previously supported Mamdani, aren’t sold on the idea of less police.
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“Removing or preventing us from having those resources is a step in the wrong direction when our schools and children clearly need more support,” Paola, a Zeta parent, said in a press release. “We need more preventive officers and programs to keep our neighborhoods in the Bronx safe.”
“I am one of those who initially had a lot of faith in Mayor Mamdani, but I’m starting to get scared because he doesn’t seem aware of the actual needs of my community. The safety of my child and my own students is non-negotiable, and we must find the funding to keep our little ones safe.”
Aimee told Fox News Digital “we need more police” to “help us” and urged the mayor to “consider us.”
The Change.org petition requests a “dedicated traffic officer” during arrival and dismissal hours at the school and argues that “traffic officers are assigned at busy school crossings across New York City” and the children at the charter school “deserve the same protection” as those public schools.
A parent named Lou described the situation as “very dangerous” and that many vehicles simply “don’t abide by the law.”
Fox News Digital witnessed several close calls at the intersection with cars making illegal or dangerous turns, honking horns, and coming to an abrupt stop as children were being ushered to school nearby.
“I don’t get why he’s saying less cops or less funding,” Paola told Fox News Digital, adding that the neighborhood is also suffering from crime issues related to drugs.
“There has to be money somewhere.”
In a statement to Fox News Digital, an NYPD spokesperson said “The Commanding Officer of the 48 precinct is working with community leaders and elected officials to get more School Crossing Guards.”
“Additionally, personnel from the 48 precinct are working with Department of Transportation to work on additional signage and redesign of the intersection. Year-to-date, there have been no collisions at the intersection Arthur Avenue and East Tremont Avenue. Year-to-date, the NYPD has issued 67 summonses to vehicles in the vicinity of Arthur Avenue and East Tremont Street. Traffic safety is a shared responsibility and the NYPD, along with personnel from the 48 precinct, are committed to supporting local schools in achieving that goal.”
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New York City Mayor Zohran Mamdani delivers remarks at the Service Employees International Union 32BJ SEIU rally on Park Avenue in Manhattan on April 15, 2026. (Selcuk Acar/Anadolu)
Mamdani won the Bronx in November’s mayoral election with 51% of the vote, compared to 40% for former Governor Andrew Cuomo and 7% for Republican Curtis Sliwa.
The United States and Iran on Friday were taking steps to resume peace talks, as Defense Secretary Pete Hegseth said that the U.S. blockade of Iranian ships and ports would continue for “as long as it takes” to get Tehran to agree to a deal.
Steve Witkoff, a U.S. special envoy, and Jared Kushner, President Trump’s son-in-law, planned to travel to Islamabad, Pakistan’s capital, on Saturday for negotiations, Karoline Leavitt, the White House press secretary, said on Friday.
“Steve and Jared will be heading to Pakistan tomorrow to hear the Iranians out,” Ms. Leavitt told reporters outside the White House. “We hope progress will be made, and we hope that positive developments will come from this meeting.”
Mr. Trump, Vice President JD Vance, who has been leading the talks with the Iranians, and Secretary of State Marco Rubio “will be waiting here in the United States for updates,” Ms. Leavitt added.
Iran’s foreign minister, Abbas Araghchi, arrived in Islamabad on Friday, Iranian state media reported. He was carrying a written response to a U.S. proposal for a peace deal, according to two senior Iranian officials familiar with his plans.
Earlier, the Iranian officials, who spoke on the condition of anonymity to discuss sensitive diplomacy, said Mr. Araghchi had been expected to meet with Mr. Witkoff and Mr. Kushner this weekend. But later, a spokesman for Iran’s foreign ministry, Esmail Baghaei, said in a post on X that no meeting was planned between Iran and the United States in Pakistan and that Iran would convey its position through Pakistani officials.
While Iran has publicly rejected peace talks during the U.S. naval blockade of its ports, the two Iranian officials said that Tehran has been exchanging messages through Pakistan and engaging in diplomacy to resume talks. The Trump administration has said the military cordon is aimed at crushing the Iranian economy and pressuring Tehran to make a deal.
Mr. Hegseth said on Friday that while the naval blockade would continue, the U.S. military remained poised to attack Iran again on Mr. Trump’s orders.
“Iran knows that they still have an open window to choose wisely at the negotiating table,” Mr. Hegseth told reporters at the Pentagon.
Many sticking points remain, including the reopening of the Strait of Hormuz; the fate of Iran’s highly enriched uranium; and Tehran’s demand that about $27 billion in frozen assets held abroad be released.
The United States and Iran agreed to a cease-fire more than two weeks ago. Still, tensions have remained high in and around the strait, a crucial conduit for Persian Gulf crude oil and natural gas. On Tuesday, Mr. Trump said he was extending the cease-fire indefinitely. But both Iran and the United States have continued to seize vessels they said have violated their restrictions on shipping in the waterway.
On Friday, the U.S. Treasury Department rolled out a blitz of new sanctions targeting 40 shipping firms and vessels it said were part of Iran’s “shadow fleet” of oil tankers. It also imposed sanctions on a China-based independent refinery, Hengli, which the Treasury identified as one of Iran’s largest customers for crude oil and other petroleum products.
The United States and Iran moved to resume talks as clashes between Israel and Hezbollah, the Iranian-backed militia, intensified in Lebanon on Friday, straining a separate cease-fire that was also extended by the White House.
Mr. Trump announced a three-week extension of the truce in Lebanon on Thursday, after hosting Israeli and Lebanese diplomats at the White House. Hezbollah, which is not part of the negotiations, has signaled it intends to abide by the truce if Israel does the same.
Strikes between Israel and Hezbollah have plummeted since an initial cease-fire was announced last week. But both sides have continued to exchange fire, raising fears that the truce could collapse into an all-out war.
“Cease-fire? What cease-fire while drones are still hovering above us?” said Fatima al-Masri, 49, who was in the southern Lebanese town of Qana on Friday. She was visiting the grave of her husband, an emergency worker, who had been killed in the conflict.
“What cease-fire while we are still losing our men and our loved ones?” she said, adding, “We want this war to be over.”
The current conflict that began last month has killed about 2,500 people in Lebanon, the country’s health ministry said, as well as two civilians and 15 soldiers in Israel, officials said.
The fighting began last month, when Hezbollah fired rockets into Israel in support of Iran, setting off a large-scale Israeli bombing campaign and ground invasion of southern Lebanon. Israeli forces are still deployed in a broad section of the country’s south, which Israeli officials have said they plan to occupy indefinitely.
Israel appeared to escalate its operations on Friday, issuing evacuation warnings for the southern Lebanese town of Deir Aames before launching airstrikes hours later. The town lies beyond the six-mile-deep “forward defense line” that Israel said it would control amid the cease-fire, suggesting that Israel’s strikes were widening.
The Israeli military said in a statement that Hezbollah had launched rockets from the town a day earlier toward northern Israel. Hezbollah also said it had again fired drones at Israeli troops in southern Lebanon on Friday.
Israel’s defense minister, Israel Katz, has pledged to continue demolishing border towns and villages amid the cease-fire. Hundreds of thousands of Lebanese remain displaced from the region, many with little idea if or when they can return.
During the talks at the White House on Thursday, Lebanon called for an end to those demolitions, according to a senior Lebanese official briefed on the negotiations who spoke on condition of anonymity to discuss sensitive diplomacy.
Hezbollah, for its part, expressed contempt for the state of the cease-fire on Friday, pointing to the continued Israeli military operations and reiterating its pledges to respond with force.
Mohamad Raad, Hezbollah’s leader in the Lebanese Parliament, said in a statement that the truce was “not a cease-fire at all,” and he urged the Lebanese government to withdraw from direct negotiations with Israel.
“The authorities should feel ashamed before their people,” Mr. Raad said, raising already simmering tensions between the Lebanese government and Hezbollah, a group it does not control.
Israel’s strikes this week killed Amal Khalil, a reporter for the Lebanese newspaper Al-Akhbar, and wounded another person in southern Lebanon, further rattling the tenuous truce.
The cease-fire agreement, released last week by the State Department, said that Israel would cease “offensive military operations” in Lebanon but “preserve its right to take all necessary measures in self-defense, at any time, against planned, imminent or ongoing attacks.”
Prime Minister Benjamin Netanyahu of Israel accused Hezbollah in a recorded video statement on Friday of moving to “sabotage” peace efforts between Israel and Lebanon, signaling the military had no intention to cease attacks against the group.
“We have maintained full freedom of action against any threat, including emerging threats,” Mr. Netanyahu said. “We attacked yesterday, we attacked today. We are determined to restore security to the residents of the north.”
Reporting was contributed by Helene Cooper, Alan Rappeport, Pranav Baskar, Sarah Chaayto, John Ismay, Michael Levenson and Abdi Latif Dahir.
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