The United States Department of Justice has closed its investigation into Federal Reserve Chair Jerome Powell, removing a major obstacle to the confirmation of his successor, Kevin Warsh. The probe, which focused on cost overruns in renovations of the Fed's Washington headquarters, was dropped due to lack of evidence.

US Attorney for the District of Columbia Jeannine Pirro, a Trump ally, announced the decision on X on Friday, stating that the Fed's Office of Inspector General would now handle the matter. “The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” Pirro said, expressing confidence in a swift and comprehensive report.

The move paves the way for a Senate confirmation vote on Warsh, a former top Fed official nominated by President Donald Trump in January to replace Powell, whose term ends May 15. Republican Senator Thom Tillis had blocked the confirmation until the investigation was resolved.

During a Senate hearing Tuesday, Republicans praised Warsh while Democrats questioned his independence from Trump and his stance on interest rates. Senator Elizabeth Warren asked if Warsh would be a “sock puppet.” Warsh insisted he never promised the White House to cut rates, saying, “The president never once asked me to commit to any particular interest rate decision, period.”

The investigation had struggled for months, with prosecutors failing to find evidence of a crime. In March, a judge quashed subpoenas issued to the Fed, calling the justification “thin and unsubstantiated.” The closure marks a rare retreat for a DOJ that has aggressively pursued Trump's perceived adversaries.

The leadership transition at the world's most influential central bank is now expected to proceed quickly, with Warsh's confirmation likely in the coming weeks.

Source: www.aljazeera.com