The US Department of Justice's decision to drop its investigation into Federal Reserve Chair Jerome Powell has brought President Donald Trump's economic policy ambitions a 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 and is awaiting a final vote.
However, Republican Senator Thom Tillis had previously stated that he would block Warsh's confirmation as long as the DOJ's investigation into Powell continued. The investigation, which was related to cost overruns in a Federal Reserve building project, was dropped on Friday, with the DOJ requesting that the Fed's inspector general conduct an inquiry and issue a report. Following the news, the likelihood of Warsh's confirmation before May 15 increased significantly, according to prediction markets. US Attorney for the District of Columbia Jeanine Pirro stated that she expects a comprehensive report and is confident that the outcome will resolve the questions that led to the investigation.
The development may grant Trump greater influence over US monetary policy, as having his nominees in key positions at the Federal Reserve could lead to more allies on the Fed board. This, in turn, could impact decisions on financial policy, including regulations governing the cryptocurrency industry and stablecoin issuers.
Senator Elizabeth Warren criticized the move, dismissing it as an attempt to clear the path for Warsh's confirmation and noting that the administration is still pursuing a case against Fed Governor Lisa Cook. Senator Tillis, on the other hand, 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.