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, whose personal wealth includes cryptocurrency assets, has been waiting for a final Senate vote after appearing in a confirmation hearing.
Trump, who has criticized Powell for 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 a Fed building project's cost overruns. The investigation was dropped on Friday, with the DOJ asking the Fed's inspector general to investigate and report on the matter.
This development has increased the likelihood of Warsh's confirmation, with prediction markets showing odds of over 80%. The US Attorney for the District of Columbia, Jeanine Pirro, stated that she expects a comprehensive report and is confident it will resolve the questions that led to the investigation.
Trump's ability to appoint his own people to the Federal Reserve would not only increase his influence over US monetary policy but also give him more allies on the Fed board, which makes decisions on financial policy, including rules governing the crypto industry. Senator Elizabeth Warren criticized the move, calling it an attempt to clear the path for Warsh's confirmation and noting that the administration is still pursuing Fed Governor Lisa Cook in court. Senator Tillis, on the other hand, expressed his support for Warsh, calling him a 'great nominee' and stating that he would vote yes on his confirmation once the DOJ dropped its investigation into Powell.