The Federal Reserve Board is urging a judge to reject a prosecutor's request to reconsider a recent decision that quashed a criminal investigation subpoena against Chairman Jerome Powell. The investigation centers on the costly renovation of the Fed's headquarters and Powell's related congressional testimony.

In court documents unsealed on Thursday, Fed lawyers told Judge James Boasberg that the motion for reconsideration filed by the U.S. Attorney's Office for the District of Columbia fell far short of the required legal threshold. The lawyers stated that the motion "does not even mention—let alone satisfy—the demanding legal standard applicable to the extraordinary relief it seeks."

They argued that reconsideration should only be granted if there is a change in the law, new evidence emerges, or to "correct a clear error or prevent a manifest injustice," none of which they claim is present in this case. The Fed's lawyers wrote that the prosecution's motion "does not attempt to surmount these high bars, but instead mischaracterizes the Court's opinion... and the record on which it was based."

This stance from the Fed was expected, as the Board initially sought to block the subpoena, arguing it was a pretext to pressure Powell into faster and larger interest rate cuts—a demand repeatedly made by former President Donald Trump.

Separately, Trump criticized Powell on Thursday, calling him a "clown" at the Fed. Judge Boasberg's ruling had extensively cited Trump's past criticisms, noting the former president had long questioned why Powell couldn't be removed.

It remains unclear when Judge Boasberg will rule on the motions or whether the investigation into Powell will be terminated if U.S. Attorney Jessie K. Liu's office fails to persuade the judge to overturn the March 11 decision. Her office argued in its March 12 motion that the judge's ruling "applied the wrong legal standard, was clearly erroneous on several material facts, and overlooked other relevant facts."

Overturning such rulings is exceptionally rare at both the district and appellate court levels.

In a related development, Republican Senator Thom Tillis of North Carolina has vowed to block the confirmation of Kevin Warsh as a potential successor to Powell until the investigation is concluded.

Judge Boasberg's strongly worded decision quashed two subpoenas issued to the Fed Board, which sought records related to the multi-billion-dollar headquarters renovation and Powell's "brief mentions" of the project during Senate committee testimony. The judge agreed with the Fed's argument that the subpoenas were issued for an improper purpose, citing substantial evidence that their primary aim was to harass Powell or pressure him to resign.

During a sealed hearing over a week before the ruling, prosecutors acknowledged they had no clear evidence of fraud related to the renovation. When asked by Judge Boasberg what evidence indicated fraud or criminal misconduct, prosecutor G. A. Masuoko-Ratcliffe replied, "We don't know at this point." She added, however, that the $1.2 billion cost overrun was reason enough to investigate, calling the amount suspicious.

Judge Boasberg dismissed this justification as a "pretext for a legitimate purpose," noting that construction projects often exceed budgets and that alone does not suggest criminal activity. He also pointed out that the Fed's independent inspector general had full access to project details, conducted an audit years ago, and raised no fraud concerns.

In his Thursday remarks, Trump also criticized the renovation's cost and slow progress, claiming he could have completed the building for a fraction of the cost and alleging that Powell was not being held accountable.