The US Department of Justice's decision to abandon its investigation into Federal Reserve Chair Jerome Powell has brought President Donald Trump's economic agenda a step closer to realization, as his nominee, Kevin Warsh, may now have a clearer path to confirmation. Warsh, who has significant personal wealth, including assets in the cryptocurrency space, appeared before a Senate confirmation hearing and is awaiting a final vote. Trump, who has consistently criticized Powell for maintaining high interest rates, chose Warsh to address this issue. However, Republican Senator Thom Tillis had vowed to block Warsh's confirmation as long as the DOJ pursued its investigation into Powell regarding cost overruns in a Federal Reserve building project.
The investigation was dropped, and US Attorney for the District of Columbia Jeanine Pirro stated that the DOJ has requested the Fed's inspector general to investigate the matter and issue a report. Following the news, the odds of Warsh's confirmation before May 15 surged from around 30% to over 80%. Pirro noted that she expects a comprehensive report soon and is confident that the outcome will resolve the questions that led to the issuance of subpoenas. She also stated that she will not hesitate to restart the investigation if the facts warrant it.
Having his nominee at the helm of the Federal Reserve would not only grant Trump greater influence over US monetary policy but also provide him with more allies on the Fed board, particularly in decisions related to the crypto industry and stablecoin issuers. Due to Tillis' threat, Warsh's confirmation may have been delayed, potentially leaving Powell in charge beyond the May 15 expiration of his term. Now, the Republican-majority Senate may be able to move more quickly towards confirming Warsh, who insisted during his hearing that he would act independently of White House direction. Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, criticized the move, stating that it is an attempt to clear the path for Warsh's confirmation.
Warren noted that the administration is still pursuing Fed Governor Lisa Cook in court and argued that the Justice Department's decision is an attempt to install Trump's nominee as Fed chair. 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 drops its investigation into Powell.