“I have directed my office to close our investigation,” US Attorney Jeanine Pirro announced on X.
Pirro said the inspector general for the Fed would instead look into renovation cost overruns at its headquarters, which the Justice Department had been probing – under heavy pressure from Trump.
Trump has upended Washington norms by routinely criticising the Fed for not following his calls to cut interest rates more rapidly, while making personal attacks on Powell in particular.
The probe into Powell, whose term expires May 15, looked likely to hold up the Senate’s confirmation of Trump’s pick for a new chairman.
Now, Pirro’s announcement is likely to ease that path.
The Trump administration “remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman,” White House spokesman Kush Desai said soon after the Justice Department probe was dropped.
The investigation had been criticised by former Fed chiefs and lawmakers as an attempt to undermine the central bank’s independence from politics.
At Warsh’s confirmation hearing this week before the Senate Banking Committee, Republican Senator Thom Tillis reiterated that he would continue blocking new appointments to the Fed if the Powell investigation were not resolved.
Tillis’ vote against the appointment would have been enough to set up an impasse on the panel, which Warsh needs to clear to become the next Fed chief. (AFP)
