The Department of Justice has dropped its investigation into current Federal Reserve Chair Jerome Powell, clearing the path for his successor nominee Kevin Warsh. According to reports from The Economic Times, Republican Senator Thom Tillis announced he would no longer block Warsh's confirmation process after the DOJ's decision. Tillis had previously pledged to prevent any Federal Reserve nominee from advancing while the probe remained active, but his shift effectively ends months of uncertainty surrounding the nomination. Tillis now says he is 'prepared to move on with the confirmation' of Warsh, a former top Fed official whom US president Donald Trump nominated in January to replace Powell.
The investigation into Powell stemmed from his oversight of a $2.5 billion renovation project involving two Federal Reserve buildings in Washington. As reported by The Economic Times, Powell disclosed earlier this year that the Department of Justice had launched a criminal inquiry into the matter. US Attorney Jeanine Pirro announced on Friday that the investigation was being terminated because the Fed's inspector general would scrutinize the renovations instead. The investigation had failed to gain traction as prosecutors struggled to articulate a basis for criminal conduct. A prosecutor handling the Powell case conceded at a closed-door court hearing in March that the government hadn't found any evidence of a crime, and a judge subsequently quashed subpoenas issued to the Federal Reserve. Judge James Boasberg said prosecutors had produced 'essentially zero evidence' to suspect Powell of a crime, branding their justification as 'thin and unsubstantiated'.
Kevin Warsh, who served as a Federal Reserve governor from 2006 to 2011, has outlined plans to reshape the central bank's monetary policy framework and coordinate more closely with other parts of the government on broader economic matters. During his confirmation hearing, Warsh promised to be independent from the White House, stating he never promised the White House that he would cut interest rates, even as Trump renewed calls for rate cuts. Warsh said under questioning by the Senate Banking Committee that ''''The president never once asked me to commit to any particular interest rate decision, period'''' and ''''Nor would I ever agree to do so if he had''''. However, Massachusetts Democratic senator Elizabeth Warren said during the hearing that Warsh would be a 'sock puppet' for Trump''. Despite unified Democratic opposition, Republicans on the Senate Banking Committee have sufficient support to move Warsh's nomination forward.
With Tillis's backing now secured, the Senate Banking Committee is set to vote on April 29, with a full Senate vote expected to follow potentially during the week of May 11. As reported by crypto.news, holding a seat on the Senate Banking Committee, Tillis had been in a position to delay the process through procedural holds or withholding support, which would have prevented the nomination from advancing to the full Senate. Jerome Powell's current term is scheduled to end on May 15. If confirmed, Warsh is likely to assume the role within days, placing him at the helm of the U.S. central bank at a time when monetary policy remains closely watched across markets. Powell has previously asked the Fed's independent inspector general to investigate the cost overruns, and the probe was among several undertaken by the Justice Department into Trump's perceived adversaries.
