The US Department of Justice's decision to drop its investigation into Federal Reserve Chair Jerome Powell has brought President Donald Trump's economic agenda one step closer to fruition, as his nominee to replace Powell, Kevin Warsh, may now face a smoother confirmation process. Warsh, who has significant personal wealth, including investments in the crypto sector, has been awaiting a final Senate vote after a recent confirmation hearing.
Trump, who has criticized Powell for maintaining high interest rates, chose Warsh to address this issue, but the confirmation was previously blocked by Republican Senator Thom Tillis due to the ongoing investigation into Powell. The investigation, which was dropped on Friday, centered on cost overruns in a Fed building project.
Following the news, the odds of Warsh's confirmation before May 15 increased significantly. US Attorney for the District of Columbia Jeanine Pirro stated that the DOJ has asked the Fed's inspector general to investigate the matter and issue a report. Trump's ability to appoint his own people to the Federal Reserve would grant him greater influence over US monetary policy and provide him with more allies on the Fed board, particularly in decisions regarding the crypto industry and stablecoin issuers. The development may allow the Republican-majority Senate to move more quickly towards confirming Warsh, who has insisted on his independence from White House direction during his hearing.
However, Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, has criticized the move, calling it an attempt to facilitate Warsh's confirmation. Tillis has expressed his support for Warsh, stating that he would vote in favor of the nominee once the DOJ dropped its investigation into Powell.