A significant development has occurred in the US financial landscape as President Donald Trump's Department of Justice has decided to drop its investigation into Federal Reserve Chair Jerome Powell, potentially paving the way for Trump's nominee, Kevin Warsh, to take the reins. Warsh, who has substantial personal wealth, including assets in the cryptocurrency sector, has been awaiting a final Senate vote following his confirmation hearing. Trump, who has been critical of Powell's handling of interest rates, selected Warsh as his nominee, but the confirmation process had been stalled due to a criminal probe into Powell's involvement in a Federal Reserve building project.
The investigation's closure has raised the odds of Warsh's confirmation before May 15 from 30% to over 80%, according to Kalshi's prediction betting. US Attorney for the District of Columbia Jeanine Pirro stated that the DOJ has requested the Fed's inspector general to investigate the matter and issue a report. The development has significant implications for Trump's influence over US monetary policy, as having his nominee at the helm of the Federal Reserve would grant him greater control.
The move has also sparked reactions from lawmakers, with Senator Elizabeth Warren dismissing the decision as an attempt to clear the path for Warsh's confirmation, while Senator Thom Tillis expressed support for the nominee, calling him 'great'.