The US Department of Justice has abandoned its investigation into Federal Reserve Chair Jerome Powell, bringing President Donald Trump's economic agenda one step closer to fruition. The move could facilitate the confirmation of Trump's nominee, Kevin Warsh, to replace Powell. Warsh, a wealthy individual with cryptocurrency assets, has been awaiting a Senate vote following his confirmation hearing. Trump has consistently criticized Powell for maintaining high US interest rates and hopes Warsh will address this issue.
However, Republican Senator Thom Tillis had previously threatened to block Warsh's confirmation as long as the DOJ pursued its investigation into Powell. The investigation, which was dropped on Friday, centered on cost overruns in a Federal Reserve building project. The US Attorney for the District of Columbia, Jeanine Pirro, has directed the Fed's inspector general to investigate the matter and issue a report.
Following the news, the likelihood of Warsh's confirmation before May 15 increased significantly. The development could grant Trump greater influence over US monetary policy and provide him with more allies on the Federal Reserve board.
Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, dismissed the move, stating that the administration is still pursuing Fed Governor Lisa Cook in court. Warren claimed that the Justice Department's decision was an attempt to clear the path for Warsh's confirmation. 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 Warsh once the DOJ dropped its investigation into Powell.