The Department of Justice (DOJ) announced today that it is ending its criminal investigation into Federal Reserve Chair Jerome Powell. This decision potentially removes a significant hurdle for the confirmation of Kevin Warsh, President Trump's nominee to succeed Powell as head of the central bank.
U. S. Attorney Jeanine Pirro stated that the Fed's Inspector General would instead investigate potential cost overruns related to the renovation of the Federal Reserve's headquarters in Washington, D. C.. While the DOJ is closing its investigation, Pirro noted that it could be reopened if warranted by new evidence. She expects a "comprehensive report" from the Inspector General regarding their findings.
The investigation had become a point of contention, with Senator Thom Tillis blocking Warsh's confirmation until the probe was resolved. Tillis had urged the administration to end the investigation to allow the confirmation process to move forward. Powell initially disclosed the investigation in January of this year.
The closure of the DOJ investigation is likely to be viewed favorably by markets, reducing uncertainty surrounding the leadership transition at the Federal Reserve. It remains to be seen how quickly the Senate will proceed with Warsh's confirmation now that this obstacle has been removed.
