The US Department of Justice, under President Donald Trump, has dropped its investigation into Federal Reserve Chair Jerome Powell, potentially paving the way for Trump's nominee, Kevin Warsh, to take over as Fed Chair. The investigation, which was related to cost overruns in a Fed building project, has been passed on to the Fed's own inspector general.
This development may have significant implications for US financial and economic policy, as Warsh's confirmation could give Trump greater influence over the Federal Reserve. Warsh, who has significant wealth, including crypto assets, has stated that he would act independently of the White House. However, not everyone is convinced, with Senator Elizabeth Warren dismissing the move as an attempt to install a Trump ally as Fed Chair. The decision to drop the investigation has been met with skepticism, with some arguing that it is an attempt to clear the path for Warsh's confirmation.
The development has also led to a surge in prediction betting, with odds of Warsh's confirmation before May 15 increasing from 30% to over 80%. The move has significant implications for the crypto industry, as the Fed plays a crucial role in regulating the industry. With Warsh at the helm, the Fed may take a more favorable approach to the industry, which could have significant implications for the future of crypto and stablecoin issuers.