US Justice Department Drops Probe, Paving Way for Trump's Federal Reserve Nominee

The US Department of Justice, led by President Donald Trump, has abandoned its investigation into Federal Reserve Chair Jerome Powell, potentially paving the way for Trump's nominee, Kevin Warsh, to take over as Fed chair. Warsh, who has significant personal wealth, including investments in cryptocurrency, is awaiting a final Senate vote after a recent confirmation hearing. Trump has been critical of Powell's handling 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's investigation into Powell continued. The investigation, which centered on cost overruns in a Fed building project, was dropped on Friday, with the US Attorney for the District of Columbia, Jeanine Pirro, stating that the Fed's inspector general would take over the inquiry. Following the news, predictions of Warsh's confirmation before May 15 surged from around 30% to over 80%. Pirro noted that she would not hesitate to restart the investigation if warranted. The development could grant Trump greater influence over US monetary policy and provide him with more allies on the Fed board, particularly in regards to the crypto industry and stablecoin issuers. Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, criticized the move, calling it an attempt to clear the path for Warsh's confirmation. She also pointed out that the administration is still pursuing a court case against Fed Governor Lisa Cook. 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.