The pathway for President Donald Trump’s nominee to lead the Federal Reserve has been cleared following the Department of Justice’s withdrawal of an investigation targeting Federal Reserve Chair Jerome Powell. This decision potentially facilitates Kevin Warsh, Trump’s pick and a wealthy individual with crypto assets, in his Senate confirmation process. Following his hearing this week, Warsh now awaits a final vote from the Senate.
Trump has frequently criticized Powell for sustaining high U.S. interest rates. His choice of Warsh is intended to address these concerns; however, Republican Senator Thom Tillis had indicated he would obstruct the nomination as long as the investigation into Powell remained active due to alleged cost overruns in a Fed building project.
On Friday, Attorney General Jeanine Pirro announced that the DOJ would instead request an inspector general’s review of the renovation issue. This development prompted Kalshi’s prediction on Warsh’s confirmation odds before May 15 to surge from approximately 30% to over 80%.
Pirro assured via a social media post on X that a thorough report was forthcoming: “I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas. Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry.” She also mentioned that the criminal probe could be reinitiated if necessary.
Appointing allies like Warsh to lead the Federal Reserve increases Trump’s influence on U.S. monetary policy and grants him more sway over financial decisions, including those affecting the crypto sector and stablecoin issuers.
Previously, Tillis’ stance might have stalled Warsh’s confirmation as long as the DOJ maintained its investigation, potentially extending Powell’s term beyond May 15. Now, with a Republican-majority Senate, swift action towards confirming Warsh is more feasible. During his hearing, Warsh affirmed he would operate independently from presidential directives.
Senator Elizabeth Warren criticized the development and highlighted ongoing legal actions against Fed Governor Lisa Cook by the administration: “This is just an attempt to clear the path for Senate Republicans to install President Trump’s sock pocket Kevin Warsh as Fed chair,” she stated. She emphasized that while the DOJ withdrew its investigation of Powell, it continued pursuing charges against Cook.
Tillis praised Warsh as a “great nominee” and declared his intention to support him post-investigation withdrawal: “I look forward to supporting him out of committee once the DOJ drops their bogus investigation into Chairman Powell that threatens the independence of the Fed.”