DOJ Drops Investigation, Paving Way for Trump's Federal Reserve Nominee

The US Department of Justice's decision to back down from an investigation into Federal Reserve Chair Jerome Powell could pave the way for President Donald Trump's nominee, Kevin Warsh, to take the reins. Warsh, who has significant personal wealth, including cryptocurrency assets, has been awaiting a final Senate vote after a recent confirmation hearing. Trump, who has criticized Powell for high US interest rates, chose Warsh to address this issue. However, Republican Senator Thom Tillis had vowed to block Warsh's confirmation as long as the DOJ pursued an investigation into Powell over cost overruns in a Fed building project. The investigation was dropped, and the DOJ has asked the Fed's inspector general to look into the matter and issue a report. Following the news, the likelihood of Warsh's confirmation before May 15 surged from 30% to over 80% on Kalshi's prediction betting platform. US Attorney for the District of Columbia Jeanine Pirro stated that her office would close the investigation, allowing the inspector general to undertake the inquiry, but noted that she would not hesitate to restart a criminal investigation if warranted. Having allies on the Fed board would grant Trump greater influence over US monetary policy, including decisions on the crypto industry and stablecoin issuers. With the investigation dropped, the Republican-majority Senate may now move more quickly to confirm Warsh, who asserted his independence from White House direction during his hearing. Senator Elizabeth Warren dismissed the move, pointing out that the administration is still pursuing Fed Governor Lisa Cook in court, and called it an attempt to clear the path for Warsh's confirmation. Senator Tillis, who had threatened to block Warsh's nomination, expressed support for the nominee, stating that he would vote yes once the DOJ dropped its investigation into Powell.