The US Department of Justice's decision to abandon its investigation into Federal Reserve Chair Jerome Powell has brought President Donald Trump's nominee, Kevin Warsh, one step closer to confirmation. Warsh, who has significant personal wealth, including assets in the cryptocurrency sector, is awaiting a final Senate vote after a recent confirmation hearing. Trump, who has criticized Powell for high interest rates, chose Warsh to address this issue.
However, Republican Senator Thom Tillis had threatened to block Warsh's confirmation as long as the DOJ pursued the investigation into Powell regarding cost overruns in a Fed building project. The probe was dropped, and the DOJ has asked the Fed's inspector general to investigate and report on the matter. Following the news, betting odds on Warsh's confirmation before May 15 surged from 30% to over 80%.
US Attorney Jeanine Pirro stated that she expects a comprehensive report and will close the investigation but may reopen it if necessary. Trump's ability to appoint his nominees to the Federal Reserve would grant him greater influence over US monetary policy and provide him with more allies on the Fed board, which makes decisions on financial policy, including rules for the crypto industry. Senator Elizabeth Warren criticized the move, calling it an attempt to clear the path for Warsh's confirmation, while Senator Tillis expressed support for Warsh, saying he would vote yes once the DOJ dropped its investigation into Powell.