The US Department of Justice, under President Donald Trump, has dropped its investigation into Federal Reserve Chair Jerome Powell, potentially paving the way for Trump's nominee, Kevin Warsh, to take over as Fed chair. Warsh, who has significant personal wealth, including cryptocurrency assets, is awaiting a Senate vote after a confirmation hearing. Trump has been critical of Powell's management of interest rates and chose Warsh as his replacement. However, Republican Senator Thom Tillis had threatened to block Warsh's confirmation as long as the DOJ investigation into Powell was ongoing.
The investigation, which was related to cost overruns in a Federal Reserve building project, has been passed on to the Fed's inspector general. The move has increased the likelihood of Warsh's confirmation, with some prediction markets giving him over 80% odds of being confirmed by May 15. The development could give Trump greater influence over US monetary policy and the regulation of the cryptocurrency industry.
However, not everyone is convinced, with Senator Elizabeth Warren dismissing the move as an attempt to install a Trump loyalist as Fed chair.