The US Department of Justice's decision to back down from investigating Federal Reserve Chair Jerome Powell may have brought President Donald Trump's economic agenda one step closer to fruition. Trump's nominee to replace Powell, Kevin Warsh, has been awaiting a Senate vote after a confirmation hearing.
The DOJ's investigation into Powell, which centered on cost overruns in a Fed building project, had been a major obstacle to Warsh's confirmation. Republican Senator Thom Tillis had vowed to block the confirmation as long as the investigation was ongoing. With the investigation now dropped, the path to confirmation may be open for Warsh.
The development has significant implications for US monetary policy, as Trump's influence over the Federal Reserve could increase with his nominee at the helm. The Fed's decisions on financial policy, including regulations governing the crypto industry, may also be impacted.
Senator Elizabeth Warren criticized the move, calling it an attempt to install a Trump loyalist as Fed chair. Despite this, Warsh has insisted he would act independently of White House direction. The Senate may now move more quickly to confirm Warsh, who has been seen as a strong contender for the role.