Justice Department Ends Investigation into Fed Chair Powell, Paving Way for Warsh Confirmation
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The U.S. Justice Department has concluded its investigation into Federal Reserve Chair Jerome Powell, removing a significant obstacle to the Senate confirmation of Kevin Warsh as his successor.
The U.S. Department of Justice has concluded its criminal investigation into Federal Reserve Chair Jerome Powell, which focused on cost overruns in the central bank's headquarters renovation project. U.S. Attorney for the District of Columbia Jeanine Pirro announced the decision on Friday, stating that the Federal Reserve's Inspector General would now handle the inquiry.
The investigation had been a significant impediment to the confirmation of Kevin Warsh, President Donald Trump's nominee to succeed Powell. Senator Thom Tillis (R-N.C.) had previously indicated he would oppose Warsh's confirmation until the probe was resolved. With the investigation concluded, the Senate is expected to proceed with Warsh's confirmation process.
The probe into Powell's conduct had faced criticism for lacking substantial evidence. A federal judge had earlier dismissed subpoenas issued to the Federal Reserve, describing the justification for the investigation as "thin and unsubstantiated".
Powell's term as chair is set to end on May 15. He has suggested that the investigation was an attempt to pressure the Federal Reserve into aligning with the administration's interest rate policies. Warsh, during his Senate Banking Committee hearing, pledged to maintain the Federal Reserve's independence and stated that he had not been asked to commit to any specific interest rate decisions.
The conclusion of the investigation underscores ongoing tensions between the White House and the Federal Reserve regarding monetary policy and the central bank's autonomy.