The US Department of Justice's decision to drop its investigation into Federal Reserve Chair Jerome Powell may have brought President Trump's economic agenda one step closer to fruition. Trump's nominee to replace Powell, Kevin Warsh, is now likely to have a smoother confirmation process. Warsh, who has significant personal wealth, including investments in the crypto sector, appeared before a Senate confirmation hearing and is awaiting a final vote.
The DOJ's investigation into Powell, which was related to cost overruns in a Federal Reserve building project, was transferred to the Fed's inspector general, potentially removing a major obstacle to Warsh's confirmation. Republican Senator Thom Tillis had threatened to block Warsh's nomination as long as the investigation was ongoing.
Following the news, betting odds on Warsh's confirmation before May 15 surged from around 30% to over 80%. US Attorney Jeanine Pirro stated that her office would close the investigation but reserved the right to reopen it if necessary. 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.
The development may allow the Republican-controlled Senate to expedite Warsh's confirmation, which had been stalled due to Tillis' opposition. During his hearing, Warsh insisted that he would maintain his independence from the White House. Senator Elizabeth Warren criticized the move, calling it an attempt to install a Trump loyalist as Fed chair.
Warren noted that the administration is still pursuing a court case against Fed Governor Lisa Cook. Tillis, on the other hand, expressed his support for Warsh, describing him as a 'great nominee' and indicating that he would vote in favor of his confirmation now that the DOJ has dropped its investigation into Powell.