The Justice Department ended its criminal investigation into Federal Reserve Chairman Jerome Powell on Friday, removing the last major hurdle to the Senate’s confirmation of Kevin Warsh as the central bank’s next leader — a development with consequences for monetary policy and Bitcoin.
US Attorney for the District of Columbia Jeanine Pirro Announce Close the investigation, which was launched over alleged cost overruns for a $2.5 billion renovation of the Federal Reserve’s headquarters in Washington.
Perot said she would take the matter to the Federal Reserve’s inspector general, calling for a “comprehensive report in a short time.” It left open the possibility of reopening criminal proceedings if necessary.
The investigation had no legal basis. Federal Judge James Bosberg threw out the Justice Department’s subpoenas in March after the prosecutor acknowledged that the government had found “zero evidence” of a crime, calling the justification “weak and baseless.” Powell himself has described the investigation as a political weapon, noting in January that it is “the result of the Fed setting interest rates based on our best assessment of what will serve the public, rather than following the president’s preferences.”
A “sham” investigation into Powell
Senator Thom Tillis, a Republican from North Carolina and a member of the Senate Banking Committee, has pledged to withhold confirmation of Warsh’s appointment until the investigation is complete. a description As “fake”. His opposition, coupled with united democratic resistance, stalled the nomination. With the investigation now closed, leadership expects a quick committee vote and confirmation before Powell’s term ends on May 15.
Warsh, 56, a former Federal Reserve governor and Stanford University professor, testified before the Senate Banking Committee on Tuesday and pledged “complete independence” from the White House regarding interest rate decisions. “The president never asked me to commit to any particular interest rate decision,” Warsh said.
Senator Elizabeth Warren described him as Trump’s “sock puppet”, while Republicans praised his qualifications.
For Bitcoin, the risks are high. The cryptocurrency has traded in a range between $70,000 and $92,000 this year as the Federal Reserve kept interest rates steady at 3.5%-3.75%, with traders monitoring every signal from the central bank.
Historically, low interest rates lead to lower returns on traditional assets, pushing capital toward risky assets like Bitcoin. When the Justice Department first launched its investigation in January, Bitcoin rose towards $92,000, as institutional investors read the attack on the Fed as a threat to the dollar’s credibility and a potential catalyst for lower interest rates.
Warsh is considered more hawkish than Powell on inflation, having described the Fed’s interest rate response after the pandemic as “the biggest policy mistake in 40 or 50 years.”
If he takes the helm on May 15 and maintains a restrained stance, Bitcoin bulls betting on liquidity expansion resulting from interest rate cuts could find themselves waiting longer than expected.
