The US Department of Justice, under President Donald Trump, has relinquished its investigation into Federal Reserve Chair Jerome Powell, bringing Trump's economic agenda one step closer to fruition. The decision may allow Trump's nominee, Kevin Warsh, to take over as Fed chair, as a previous obstacle to his confirmation has been removed. Warsh, who has significant personal wealth, including assets in the cryptocurrency space, has been awaiting a final Senate vote after a confirmation hearing.
Trump, who has criticized Powell for high interest rates, selected Warsh as his replacement. However, Republican Senator Thom Tillis had vowed to block Warsh's confirmation as long as the DOJ pursued its investigation into Powell over cost overruns in a Federal Reserve building project. The investigation was dropped, and the DOJ has requested the Fed's inspector general to investigate the matter and issue a report.
Following the news, the likelihood of Warsh's confirmation before May 15 rose significantly. US Attorney for the District of Columbia Jeanine Pirro stated that she expects a comprehensive report and will not hesitate to restart the investigation if necessary. Trump's ability to appoint his own Fed chair would grant him greater influence over US monetary policy and provide him with more allies on the Fed board, particularly in regards to the crypto industry.
Senator Elizabeth Warren criticized the move, calling it an attempt to clear the path for Warsh's confirmation. Tillis expressed support for Warsh, stating he would vote in favor of his nomination once the DOJ dropped its investigation into Powell.