The US Department of Justice has dropped its investigation into Federal Reserve Chair Jerome Powell, bringing President Donald Trump one step closer to exerting greater control over the country's financial and economic policies. This development may pave the way for Trump's nominee, Kevin Warsh, to replace Powell as the Fed Chair, following a confirmation hearing. Trump has been critical of Powell's handling of interest rates and had chosen Warsh as his replacement. However, the confirmation process was stalled due to a criminal probe into Powell over a Fed building project.
The investigation's closure has increased the likelihood of Warsh's confirmation, with prediction markets now giving him over 80% odds of being confirmed by May 15. US Attorney Jeanine Pirro stated that the DOJ has asked the Fed's inspector general to investigate the matter and issue a report, adding that she will not hesitate to restart the investigation if warranted.
The appointment of Warsh would give Trump greater influence over US monetary policy and the crypto industry. Senator Elizabeth Warren criticized the move, calling it an attempt to install Trump's nominee, while Senator Thom Tillis expressed support for Warsh, stating he would vote yes on his nomination now that the DOJ has dropped its investigation into Powell.