The US Department of Justice, under the Trump administration, has dropped its investigation into Federal Reserve Chair Jerome Powell, clearing a potential obstacle to the confirmation of President Trump's nominee to replace him, Kevin Warsh. The decision may signal a significant shift in the balance of power over US economic policy. Warsh, who has substantial personal wealth, including investments in cryptocurrency, had been awaiting a final vote from the Senate after a confirmation hearing.
However, 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 Federal Reserve building project. The investigation's closure has led to a surge in betting odds on Warsh's confirmation, with prediction markets now giving him over 80% chance of being confirmed by May 15.
The move has sparked controversy, with Senator Elizabeth Warren dismissing it as an attempt to facilitate Warsh's confirmation and accusing the administration of pursuing a 'bogus' investigation into Fed Governor Lisa Cook. The development is seen as a crucial step in Trump's efforts to exert greater influence over US monetary policy, particularly with regards to the regulation of the cryptocurrency industry.