The Trump administration has taken a significant step towards exerting greater control over the US financial system, as the Department of Justice has dropped its investigation into Federal Reserve Chair Jerome Powell. This move is expected to pave the way for the confirmation of Kevin Warsh, Trump's nominee to replace Powell. Warsh, who has significant personal wealth, including investments in cryptocurrency, has been awaiting a Senate vote after appearing in a confirmation hearing.
The investigation into Powell was related to cost overruns in a Federal Reserve building project, and its dismissal has removed a major obstacle to Warsh's confirmation. Senator Thom Tillis, who had threatened to block Warsh's nomination while the investigation was ongoing, has indicated that he will now support the nominee. The development has significant implications for the future of US monetary policy, as well as the regulation of the cryptocurrency industry.
Trump's ability to install his own nominee at the helm of the Federal Reserve would give him greater influence over the country's financial system, and potentially allow for more favorable treatment of the crypto industry. However, not everyone is convinced that the move is a positive development, with Senator Elizabeth Warren dismissing it as an attempt to install a 'sock puppet' at the Federal Reserve.
The nomination is still pending, but the dropping of the investigation has significantly improved Warsh's chances of being confirmed.