Justice Department ends inquiry into Jerome Powell, clears path for Warsh

The U.S. Justice Department has closed its investigation into Federal Reserve Chair Jerome Powell, facilitating the Senate's confirmation of Kevin Warsh as the new head of the central bank. U.S. Attorney for D.C. Jeanine Pirro announced, "This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns – in the billions of dollars – that have been borne by taxpayers," leading to the decision to end the inquiry. The investigation centered on a renovation project at the Fed's Washington headquarters, which has been reviewed twice by the Fed's inspector general, finding no wrongdoing.

This development strengthens President Trump's position as he seeks to solidify his influence over the Federal Reserve. With Sen. Thom Tillis of North Carolina previously threatening to block Warsh's nomination unless the inquiry was dropped, the closure of the investigation removes a significant hurdle. The outcome suggests that the administration is maneuvering effectively to ensure its preferred candidates are positioned within key financial institutions, thereby enhancing its control over monetary policy.

What to watch: The Senate's upcoming vote on Kevin Warsh's nomination to lead the Federal Reserve will be a critical moment for the administration's economic strategy.