Judge says ‘no evidence’ to justify Federal Reserve probe

A US judge has blocked efforts by the Department of Justice to investigate the Federal Reserve, delivering a victory for Fed chairman Jerome Powell, who had called the probe a pretext to try to pressure the central bank to lower interest rates.

In his ruling, Judge James Boasberg agreed, saying prosecutor Jeanine Pirro had presented “no evidence” to justify her demands for information from the Fed.

Pirro said she would appeal against the decision, saying it was “wrong on its face” and had “neutered” her ability to investigate crime.

The case has sparked concerns about political pressure on the central bank and has complicated White House efforts to install a new Fed chair.

The Federal Reserve declined to comment on Judge Boasberg’s ruling.

However, at a fiery press conference, Pirro dismissed questions about whether her pursuit of the matter would delay plans to replace Powell as chairman when his term ends in May, calling the issue “white noise”.

She criticised the decision to toss out the subpoenas filed by her office, which sought to compel the central bank to produce information about cost overruns at renovations of its offices. She said the decision was “outrageous”, noting that prosecutors typically do not have to produce evidence at this stage.

“This process has been arbitrarily undermined by an activist judge,” she said. “Jerome Powell today is now bathed in immunity.”

Pirro, an ally of Donald Trump, was appointed by the president last year as US attorney for the District of Columbia. She issued the subpoenas in January, after inquiries from her office about the renovation and about Powell’s testimony before Congress on the subject, were ignored.

The move prompted an unusually outspoken response from Powell, who put out a video accusing the Trump administration of launching the legal probe to pressure the bank into cutting interest rates.