The US Department of Justice, led by President Donald Trump, has dropped its investigation into Federal Reserve Chair Jerome Powell, bringing Trump's pick to replace him, Kevin Warsh, one step closer to confirmation. Warsh, who has significant personal wealth, including assets in the cryptocurrency space, has been awaiting a final Senate vote after a recent confirmation hearing.
The DOJ's decision to back down from the investigation may now pave the way for Warsh's confirmation, as Republican Senator Thom Tillis had previously threatened to block the nomination while the investigation was ongoing. The investigation, which was related to cost overruns in a Federal Reserve building project, has been referred to the Fed's inspector general. Following the news, betting odds on Warsh's confirmation before May 15 surged from around 30% to over 80%. US Attorney for the District of Columbia Jeanine Pirro stated that she expects a comprehensive report from the inspector general and is confident that the outcome will help resolve the questions that led to the investigation.
Trump's ability to install his own nominee at the helm of the Federal Reserve would grant him greater influence over US monetary policy and leave him with more allies on the Fed board, which makes key decisions on financial policy, including regulations governing the crypto industry. Senator Elizabeth Warren criticized the move, calling it an attempt to clear the path for Warsh's confirmation and pointing out that the administration is still pursuing a separate investigation into Fed Governor Lisa Cook. Senator Tillis, on the other hand, expressed his support for Warsh, calling him a 'great nominee' and stating that he would vote in favor of his confirmation now that the DOJ has dropped its investigation into Powell.