The US Department of Justice's decision to drop its investigation into Federal Reserve Chair Jerome Powell has brought President Donald Trump's economic policy ambitions a step closer to realization. Trump's nominee to replace Powell, Kevin Warsh, may now have a clearer path to confirmation. Warsh, who has significant personal wealth, including assets in the cryptocurrency sector, has been awaiting a final Senate vote after a confirmation hearing.
Trump, who has criticized Powell for maintaining high interest rates, chose Warsh to address this issue. However, Republican Senator Thom Tillis had threatened to block Warsh's confirmation as long as the DOJ pursued its investigation into Powell over cost overruns in a Fed building project. The investigation was dropped on Friday, with the DOJ asking the Fed's inspector general to look into the matter and issue a report.
Following the news, betting odds on Warsh's confirmation before May 15 surged from around 30% to over 80%. US Attorney for the District of Columbia Jeanine Pirro stated that she expects a comprehensive report and is confident that the outcome will resolve the questions that led to the investigation.
Pirro also warned that she would not hesitate to restart the investigation if warranted. 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.
The board's decisions include implementing rules for the cryptocurrency industry and stablecoin issuers. The investigation's closure may allow the Republican-majority Senate to move more quickly towards confirming Warsh, who has insisted that he would act independently of White House direction.
Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, dismissed the move, noting that the administration is still pursuing Fed Governor Lisa Cook in court. Warren stated that the Justice Department's announcement was an attempt to clear the path for Warsh's confirmation, calling it a 'bogus' investigation. Senator Tillis, on the other hand, expressed support for Warsh, calling him a 'great nominee' and stating that he would vote in favor of Warsh once the DOJ dropped its investigation into Powell.