The US Department of Justice, led by President Donald Trump, has dropped 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 cryptocurrency, had been awaiting a Senate vote after a 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 vowed to block Warsh's confirmation as long as the DOJ investigation into Powell was ongoing. The investigation, which centered on cost overruns in a Fed building project, was passed to the Fed's inspector general, and the DOJ announced it would close its investigation.
US Attorney Jeanine Pirro stated that she would not hesitate to restart the investigation if necessary. The move is seen as a significant step towards Trump exerting greater influence over US monetary policy, with Warsh's confirmation potentially giving him more allies on the Fed board. Senator Elizabeth Warren criticized the move, calling it an attempt to clear the path for Warsh's confirmation and noting that the administration is still pursuing a separate investigation into Fed Governor Lisa Cook.
With the DOJ investigation dropped, the Senate may now move more quickly to confirm Warsh, who has insisted he would act independently of White House direction.