DOJ Drops Jerome Powell Probe, Clearing Path For Kevin Warsh’s Confirmation As Fed Chair

• U.S. Attorney General for the District of Columbia, Jeanine Ferris Pirro, added that she is confident the IG’s report will assist in resolving the questions that led the DOJ to issue subpoenas.
• Earlier on Friday, President Trump told Semafor that an alternative investigation into the Federal Reserve’s renovation project could be considered.
• During an interview with Fox Business earlier this week, Senator Thom Tillis said that he will continue to block Warsh’s confirmation, stating that the process cannot move forward until the Powell investigation is over.

The U.S. Department of Justice on Friday dropped its criminal investigation into outgoing Federal Reserve Chair Jerome Powell, clearing a hurdle in the confirmation of Kevin Warsh as the successor.

U.S. Attorney General for the District of Columbia, Jeanine Ferris Pirro, made the announcement, while stating that the Inspector General for the Federal Reserve will undertake an inquiry into the cost overruns for the central bank’s $2.5 billion project.

Pirro added that she is confident the IG’s report will help resolve the questions that led the DOJ to issue subpoenas.

“I have directed my office to close our investigation as the IG undertakes this inquiry.  Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so,” Pirro stated in a post on X.

During an interview with Fox Business earlier this week, Senator Thom Tillis said that he will continue to block Warsh’s confirmation, stating that the process cannot move forward until the Powell investigation is over.

“At the end of the day, there's only one thing that solves this problem, and it's getting rid of the bogus investigation that started without the president's knowledge and has created this situation,” Tillis said.

Trump Signaled Alternative Probe

According to a Semafor report, President Trump signaled that an alternative investigation into the Federal Reserve’s renovation project could be considered.

“[They] could. I mean, look, it’s pretty easy,” he said. Trump added that the administration still needs to find out what went wrong with the project.

Senator Bill Hagerty said during an interview earlier this week that resolving the stalemate over the Powell probe was possible, adding that he would accept any available off-ramp.

“I’m more than willing to consider anything that would help accelerate his nomination and get him into this post. We need him there by the middle part of May, so that Jay Powell can finish her term,” Hagerty added.

Warsh Seeks ‘Regime Change’ In Fed’s Inflation Framework

Warsh called for a “regime change” in the central bank’s inflation framework during the Senate hearing earlier this week, stating that the Fed missed its mark when prices soared by 25% to 35% for Americans across the board post the COVID-19 pandemic.

“We’re still dealing with the legacy of the policy errors in 2021 and 2022. Once you let inflation take hold in the economy, it’s more expensive and harder to bring it down,” he said at the Senate Banking Committee’s confirmation hearing.

Warsh added that the Fed needs fundamental policy reforms to address the issue, noting that although inflation has eased from recent highs, ordinary Americans are still reeling from higher prices.

Meanwhile, U.S. equities were mixed in Friday morning’s trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.46%; the Invesco QQQ Trust ETF (QQQ) rose 1.46%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.4%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘bullish’ territory.

Also See: AMD Has 'Meaningful Upside' Ahead Of Earnings Due To Magnitude Of Intel's Q1 Beat, Says Analyst, Hikes Price Target By 70%

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