President Donald Trump’s command of U.S. financial and economic policy may have taken a step closer now that his Justice Department has dropped an investigation into Federal Reserve Chairman Jerome Powell, meaning his nominee to replace Powell may now have an open path to confirmation.
Fed chair nominee Kevin Warsh, whose considerable wealth includes some assets in the crypto world, is awaiting a final Senate vote after appearing at a confirmation hearing this week. Trump, who has relentlessly blamed Powell for keeping U.S. interest rates too high, chose Warsh to remedy that, but Republican Sen. Thom Tillis had promised to block confirmation as long as the DOJ opened an investigation against Powell for cost overruns on a Fed construction project.
That criminal investigation was dropped Friday, and Attorney General Jeanine Pirro said the DOJ had asked the Fed’s inspector general to review the renovation situation and issue a report. When the news emerged, Kalshi’s prediction betting on Walsh’s confirmation before May 15 rose from around 30% to over 80%.
“I expect a full report as soon as possible and am confident that its outcome will help resolve, once and for all, the issues that led this office to issue the subpoenas,” Pirro wrote in a post on the social networking site
Putting his own people at the helm of the Federal Reserve not only equates to greater influence for Trump over U.S. monetary policy, but it also leaves him with more allies on the Fed’s board as it makes financial policy decisions — including implementing the rules that govern the crypto industry and stablecoin issuers.
Because of Tillis’ threat, Warsh may have been on hold while the DOJ continued its investigation, which could have left Powell as head of the Fed indefinitely, well beyond the May 15 expiration of his term. Now the Republican-majority Senate may be able to move more quickly toward confirming the nominee, who insisted during his hearing that he would act independently of White House directives.
Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee considering his nomination, rejected the move and noted that the administration was still pursuing Fed Governor Lisa Cook in court.
“This is simply an attempt to clear the way for Senate Republicans to install Kevin Warsh, President Trump’s sock-holder, as Fed chair,” Warren said in a statement. “Let’s be clear about what the Justice Department announced today: They threatened to restart the bogus criminal investigation into Fed Chair Powell at any time, while failing to drop their ridiculous criminal investigation into Governor Lisa Cook.”
Tillis called Warsh a “great candidate.” In his own post this week on X, the senator said he would vote yes for Warsh once the DOJ moves away from Powell:
“I look forward to supporting him outside of the committee once the DOJ drops its bogus investigation into Chairman Powell that threatens the independence of the Fed.”
