The Trump administration has taken a significant step towards exerting greater control over the US financial system, as the Department of Justice has dropped its investigation into Federal Reserve Chair Jerome Powell. This move could pave the way for the confirmation of Kevin Warsh, Trump's nominee to replace Powell, who has been awaiting a final vote from the Senate.
The investigation, which was related to cost overruns in a Fed building project, had been a major obstacle to Warsh's confirmation, with Republican Senator Thom Tillis threatening to block the nomination as long as the investigation was ongoing. With the investigation now closed, Tillis has indicated that he will support Warsh's nomination. The development has significant implications for the future of US monetary policy, as well as the regulation of the crypto industry.
Warsh, who has significant personal wealth, including investments in cryptocurrency, has pledged to act independently of the White House, but his confirmation would still give Trump greater influence over the Federal Reserve. The move has been met with skepticism from Democrats, with Senator Elizabeth Warren dismissing it as an attempt to clear the path for Warsh's confirmation.
Despite this, the odds of Warsh's confirmation before May 15 have risen significantly, with some prediction markets now giving him more than 80% chance of being confirmed.