The US Department of Justice's decision to drop 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 replace Powell, Kevin Warsh, may now have a clearer path to confirmation. Warsh, who has significant personal wealth, including investments in cryptocurrency, appeared before a Senate confirmation hearing recently. Trump, who has criticized Powell for maintaining high interest rates, chose Warsh to address this issue, but Senator Thom Tillis had vowed to block the confirmation as long as the DOJ pursued its investigation into Powell over cost overruns in a Federal Reserve building project. The investigation was dropped on Friday, with the US Attorney for the District of Columbia, Jeanine Pirro, stating that the DOJ had asked 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 rose significantly. Pirro noted that she would not hesitate to restart the investigation if warranted. Trump's ability to appoint his own officials 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 relation to the crypto industry and stablecoin issuers. The development may allow the Republican-majority Senate to move more quickly towards confirming Warsh, who asserted his independence from the White House during his hearing.
However, Senator Elizabeth Warren dismissed the move, arguing that it was an attempt to clear the path for Warsh's confirmation, and noted that the administration is still pursuing a case against Fed Governor Lisa Cook. Warren stated that the Justice Department's decision was an attempt to install Warsh as Fed chair, and that the investigation into Powell could be restarted at any time. In contrast, Senator Tillis expressed his support for Warsh, calling him a 'great nominee' and stating that he would vote in favor of his confirmation once the DOJ dropped its investigation into Powell.