Trump Administration Drops Investigation, Paving Way for Federal Reserve Nominee

The US Department of Justice's decision to drop its investigation into Federal Reserve Chair Jerome Powell has brought President Donald Trump's pick to lead the Fed, Kevin Warsh, one step closer to confirmation. Warsh, who has significant personal wealth, including investments in cryptocurrency, is awaiting a final vote from the Senate after a recent confirmation hearing. Trump, who has criticized Powell for maintaining high interest rates, chose Warsh to replace him, but Senator Thom Tillis had vowed to block the confirmation as long as the DOJ pursued the investigation into Powell. The investigation, which was dropped on Friday, centered on cost overruns in a Fed building project. US Attorney Jeanine Pirro stated that the DOJ has asked the Fed's inspector general to investigate the matter and issue a report. Following the news, the odds of Warsh's confirmation before May 15 surged from 30% to over 80%. Pirro noted that she may restart the investigation if warranted. Trump's ability to appoint his own people to the Federal Reserve would grant him greater influence over US monetary policy and provide him with more allies on the Fed board. The development may allow the Republican-majority Senate to move more quickly towards confirming Warsh, who asserted his independence from the White House during his hearing. However, Senator Elizabeth Warren criticized the move, calling it an attempt to install Warsh as Fed chair and noting that the administration is still pursuing a case against Fed Governor Lisa Cook. Tillis expressed his support for Warsh, stating that he would vote in favor of the nominee once the DOJ dropped its investigation into Powell.