The US Department of Justice's decision to drop its investigation into Federal Reserve Chair Jerome Powell may have brought President Donald Trump one step closer to exerting greater control over the country's financial and economic policy. Powell has been at odds with Trump over interest rates, and the president has nominated Kevin Warsh to take his place.
However, Republican Senator Thom Tillis had vowed to block Warsh's confirmation as long as the DOJ's investigation into Powell continued. The probe, which centered on cost overruns in a Federal Reserve building project, was handed over to the Fed's inspector general, and the DOJ has requested a report on the matter. Following the news, the likelihood of Warsh's confirmation before May 15 surged from 30% to over 80%. US Attorney for the District of Columbia Jeanine Pirro stated that she expects a comprehensive report soon and is confident that it will help resolve the questions surrounding the investigation.
Trump's ability to appoint his own people to the Federal Reserve would not only give him more influence over monetary policy but also provide him with more allies on the Fed board, particularly when it comes to decisions regarding the crypto industry and stablecoin issuers. Senator Elizabeth Warren criticized the move, calling it an attempt to clear the path for Warsh's confirmation and noting that the administration is still pursuing a court case against Fed Governor Lisa Cook.
Senator Tillis, on the other hand, expressed his support for Warsh, saying he looks forward to voting for him once the DOJ drops its investigation into Powell.