The US Department of Justice, led by President Donald Trump, has relinquished its investigation into Federal Reserve Chair Jerome Powell, bringing Trump's economic agenda one step closer to realization. The move could pave the way for the confirmation of Kevin Warsh, Trump's nominee to replace Powell, who has been awaiting a Senate vote after his confirmation hearing. Warsh, whose personal wealth includes cryptocurrency assets, is expected to align with Trump's vision for the Federal Reserve, particularly in reducing US interest rates.
The decision to drop the investigation, which was related to cost overruns in a Fed building project, was made after Republican Senator Thom Tillis vowed to block Warsh's confirmation as long as the probe was ongoing. With the investigation now being handled by the Fed's inspector general, the odds of Warsh's confirmation before May 15 have significantly increased. Trump's ability to appoint his own personnel to the Federal Reserve would grant him greater influence over US monetary policy and provide him with more allies on the Fed board, which will make decisions on financial policy, including regulations for the crypto industry and stablecoin issuers.
The development has drawn criticism from Senator Elizabeth Warren, who views the move as an attempt to install a Trump loyalist as Fed chair. Despite this, Senator Tillis has expressed support for Warsh, calling him a 'great nominee' and indicating that he would vote in favor of his confirmation now that the DOJ has dropped its investigation into Powell.