The US Department of Justice's decision to drop its investigation into Federal Reserve Chair Jerome Powell has brought President Donald Trump's nominee, Kevin Warsh, one step closer to confirmation. Warsh, who has significant personal wealth, including assets in the cryptocurrency sector, is awaiting a Senate vote after appearing at a confirmation hearing. Trump, who has criticized Powell for maintaining high interest rates, chose Warsh as his replacement, but the confirmation process was stalled due to a DOJ investigation into Powell over cost overruns in a Fed building project.
The investigation was dropped on Friday, with the DOJ asking the Fed's inspector general to look into the matter and issue a report. This development has increased the likelihood of Warsh's confirmation, with prediction markets now giving him over 80% odds of being confirmed by May 15. The move is seen as a strategic play by Trump to gain greater influence over US monetary policy and install allies on the Fed board, which makes key decisions on financial policy, including regulations for the cryptocurrency industry.
Senator Thom Tillis, who had threatened to block Warsh's confirmation, has expressed support for the nominee now that the DOJ has dropped its investigation. However, Senator Elizabeth Warren has dismissed the move, calling it an attempt to clear the path for Warsh's confirmation and criticizing the administration for pursuing a 'bogus' investigation into Fed Governor Lisa Cook.