The US Department of Justice's decision to relinquish its investigation into Federal Reserve Chair Jerome Powell may have brought President Donald Trump's economic agenda one step closer to fruition, as his nominee to succeed Powell, Kevin Warsh, may now have a clearer path to confirmation. Warsh, who has significant personal wealth, including assets in the cryptocurrency sector, has been awaiting a final Senate vote following his confirmation hearing. Trump, who has consistently criticized Powell for maintaining high interest rates, selected Warsh to address this issue, but 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 DOJ dropped the investigation on Friday, with US Attorney for the District of Columbia Jeanine Pirro stating that the Fed's inspector general will examine the renovation situation and submit a report. Following this news, the likelihood of Warsh's confirmation before May 15 surged from approximately 30% to over 80% on Kalshi's prediction betting platform. Pirro stated, 'I anticipate a comprehensive report shortly and am confident that the outcome will help resolve the questions that led to the issuance of subpoenas.
Consequently, I have instructed my office to close our investigation as the inspector general conducts this inquiry. Note, however, that I will not hesitate to reopen a criminal investigation if the facts warrant it.' Having his own appointees 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 as it makes decisions on financial policy, including regulations governing the cryptocurrency industry and stablecoin issuers. Due to Tillis' threat, Warsh's nomination may have been stalled as long as the DOJ investigation continued, potentially allowing Powell to remain in charge of the Fed beyond the May 15 expiration of his term. Now, the Republican-majority Senate may be able to expedite Warsh's confirmation, who asserted during his hearing that he would act independently of White House direction.
Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, dismissed the move, pointing out that the administration is still pursuing Fed Governor Lisa Cook in court. 'This is merely an attempt to clear the path for Senate Republicans to install President Trump's nominee, Kevin Warsh, as Fed chair,' Warren said in a statement. 'Let's be clear about what the Justice Department announced today: They threatened to restart the baseless criminal investigation into Fed Chair Powell at any time while failing to drop their frivolous criminal probe against Governor Lisa Cook.' Tillis described Warsh as a 'great nominee' and stated that he would vote in favor of Warsh once the DOJ dropped its investigation into Powell, saying, 'I look forward to supporting him out of committee once the DOJ drops their bogus investigation into Chairman Powell that threatens the independence of the Fed.'