Trump's Justice Department Drops Probe, Paving Way for Federal Reserve Nominee

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. Trump's nominee to replace Powell, Kevin Warsh, is now likely to have a clearer path to confirmation. Warsh, who has significant personal wealth, including assets in the cryptocurrency sector, has been awaiting a final Senate vote after appearing in a confirmation hearing. Trump, who has criticized Powell for maintaining high interest rates, chose Warsh to address this issue, but Republican Senator Thom Tillis had vowed to block the confirmation as long as the DOJ pursued its investigation into Powell over cost overruns in a Fed building project. The investigation was dropped on Friday, with the US Attorney for the District of Columbia, Jeanine Pirro, stating that the DOJ has asked the Fed's inspector general to investigate the matter and issue a report. Following the news, the likelihood of Warsh's confirmation before May 15 rose from around 30% to over 80%. Pirro wrote on social media that she expects a comprehensive report soon and is confident that the outcome 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 provide him with more allies on the Fed board as it makes decisions on financial policy, including rules governing the crypto industry. The development may allow the Republican-majority Senate to move more quickly towards confirming Warsh, who insisted during his hearing that he would act independently of White House direction. However, Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, dismissed the move, noting that the administration is still pursuing a court case against Fed Governor Lisa Cook. Warren stated that the Justice Department's announcement was an attempt to clear the path for Senate Republicans to install Warsh as Fed chair. Senator Tillis, on the other hand, expressed his support for Warsh, calling him a 'great nominee' and stating that he would vote yes on Warsh once the DOJ dropped its investigation into Powell.