DOJ Drops Powell Probe, Clearing Path for Warsh Fed Chair Confirmation

President Donald Trump's grip on U.S. financial and economic policy just got a little tighter, now that his Department of Justice has backed away from investigating Federal Reserve Chair Jerome Powell—effectively greenlighting his preferred successor. The criminal probe, which apparently couldn't resist the drama of cost overruns in a Fed building project, was dropped on Friday, with Attorney General Jeanine Pirro announcing the DOJ asked the Fed's inspector general to investigate the renovation situation and deliver a report.

Kevin Warsh, Trump's pick to run the whole monetary show, has some skin in the crypto game himself—his considerable fortune includes a few tokens that would make even a degens' portfolio blush. He's currently waiting on a final Senate vote after a confirmation hearing this week. For the crypto crowd, this matters: installing Trump's people at the Fed means more friends in the room when decisions get made about financial policy, including the rules that govern crypto businesses and stablecoin issuers.

Republican Senator Thom Tillis had been holding Warsh's confirmation hostage until the DOJ stopped poking Powell—which could have left Powell running the Fed indefinitely past his May 15 term expiration. The moment DOJ waved the white flag, Kalshi's prediction market on Warsh's confirmation before May 15 went vertical, jumping from around 30% odds to over 80%.

"This is just an attempt to clear the path for Senate Republicans to install President Trump's sock puppet Kevin Warsh as Fed chair," Senator Elizabeth Warren, the ranking Democrat on the Senate Banking Committee, said in a statement, noting the administration is still pursuing Fed Governor Lisa Cook in court. "Let's be clear 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 probe against Governor Lisa Cook."

Tillis, however, called Warsh a "great nominee" and said he'd vote yes once the DOJ backed off Powell. During his hearing, Warsh insisted he would act independently of White House direction.