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 assets in the cryptocurrency space, had been awaiting a final Senate vote after appearing at a confirmation hearing.
Trump, who has criticized Powell for high interest rates, chose Warsh to address this issue, but Senator Thom Tillis had threatened to block the confirmation due to the ongoing DOJ investigation into Powell. The investigation, which was related to cost overruns in a Fed building project, was dropped on Friday, with the DOJ asking the Fed's inspector general to review the matter. Following the news, predictions of Warsh's confirmation before May 15 increased from 30% to over 80%. US Attorney Jeanine Pirro stated that she expects a comprehensive report and is confident it will resolve the questions that led to the investigation, but noted that she may restart the investigation if warranted.
Having Warsh at the helm of the Federal Reserve would give Trump greater influence over US monetary policy and more allies on the Fed board, particularly in decisions related to the crypto industry and stablecoin issuers. 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.