DOJ Drops Investigation Paving Way for Trump's Federal Reserve Nominee

The US Department of Justice, under President Donald Trump, has relinquished its investigation into Federal Reserve Chair Jerome Powell, potentially paving the way for the confirmation of Trump's nominee, Kevin Warsh, to take over as Fed Chair. Warsh, who has significant personal wealth, including investments in the cryptocurrency space, has been awaiting a Senate vote following his confirmation hearing. Trump has been critical of Powell's management of interest rates and had chosen Warsh as his replacement. However, Republican Senator Thom Tillis had threatened to block Warsh's confirmation as long as the DOJ's investigation into Powell continued. The investigation, which centered on cost overruns in a Federal Reserve building project, was dropped on Friday, with the DOJ referring the matter to the Fed's inspector general. US Attorney for the District of Columbia Jeanine Pirro stated that her office would close its investigation but reserved the right to reopen it if necessary. The development has increased the likelihood of Warsh's confirmation, with betting odds on his confirmation before May 15 rising from 30% to over 80%. The move is seen as a significant development in Trump's efforts to exert greater influence over US monetary policy, particularly in relation to the crypto industry and stablecoin issuers. Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, dismissed the move, describing it as an attempt to clear the path for Warsh's confirmation. Warren noted that the administration is still pursuing a court case against Fed Governor Lisa Cook. Senator Tillis, on the other hand, expressed his support for Warsh, describing him as a 'great nominee' and indicating that he would vote in favor of his confirmation now that the DOJ has dropped its investigation into Powell.