The US Department of Justice's decision to back down from an investigation into Federal Reserve Chair Jerome Powell has brought President Donald Trump's pick to replace him, Kevin Warsh, one step closer to confirmation. Warsh, who has significant personal wealth, including assets in the cryptocurrency space, is awaiting a final vote from the Senate after a confirmation hearing. Trump, who has criticized Powell for maintaining high interest rates, selected Warsh to address this issue. However, Republican Senator Thom Tillis had vowed to block Warsh's confirmation as long as the DOJ pursued an investigation into Powell over cost overruns in a Fed building project.
The investigation was dropped, and the DOJ has asked the Fed's inspector general to examine the matter. This development has increased the likelihood of Warsh's confirmation, with prediction markets showing an increase in odds from 30% to over 80%.
The move could grant Trump greater influence over US monetary policy and provide him with more allies on the Fed board, which makes decisions on financial policy, including regulations for the crypto industry. Senator Elizabeth Warren criticized the move, calling it an attempt to clear the path for Warsh's confirmation.
Tillis expressed support for Warsh, stating he would vote in favor of the nominee once the DOJ dropped its investigation into Powell.