The Department of Justice completed its criminal investigation of Federal Reserve Chairman Jerome Powell on Friday, removing the last major obstacle to the confirmation of the Senate Kevin Warsh as the next head of the central bank – the development and impact of monetary policy and Bitcoin.
U.S. Attorney for the District of Columbia Jeanine Pirro he announced The closure of the investigation, which was triggered by the alleged increase in the cost of the renovation of the Fed’s Washington headquarters, $2.5 billion.
Pirro said he had transferred the matter to the Fed’s chief inspector, calling for a “full report as soon as possible.” He left open the possibility of reopening criminal cases if necessary.
The investigation had no legal basis. The federal judge, James Boasberg, dismissed the DOJ’s subpoenas in March after the prosecutor admitted that the government had found “substantial evidence” in the case, calling the justification “thin and without evidence.” Powell himself called the survey a political tool, saying in January that “it was the result of the Federal Reserve setting interest rates based on what we can do to support the public, rather than what the president wants.”
Powell’s ‘bogus’ investigation
Senator Thom Tillis, a North Carolina Republican on the Senate Banking Committee, vowed to block Warsh’s confirmation until the investigation is complete. in explanation that as “false.” His opposition, combined with the opposition of the Democrats, stopped the nomination. After the investigation is closed, the administration hopes the committee will vote quickly and confirm before Powell’s term expires on May 15.
Warsh, 56, a former Fed governor and Stanford professor, testified before the Senate Banking Committee on Tuesday and pledged “independence” from the White House on rate decisions. “The president has never once asked me to decide on any interest rate,” Warsh said.
Senator Elizabeth Warren called him Trump’s “sock puppet,” while Republicans praised his credentials.
For Bitcoin, calculations are very important. The cryptocurrency has traded in the $70,000–$92,000 range this year as the Fed held rates steady at 3.5%-3.75%, with traders watching for any signal from the central bank.
Historically low interest rates reduce yields on conventional assets, pushing investment into riskier assets like Bitcoin. When the DOJ first launched its investigation in January, Bitcoin went up $92,000 as investors count the Fed’s attack as a threat to the dollar’s credibility and a catalyst for lowering rates.
Warsh is considered more dovish than Powell on inflation, calling the Fed’s post-pandemic response “the biggest mistake in 40 or 50 years.”
If he takes the reins on May 15 and maintains a restrictive stance, Bitcoin bulls betting on a price-driven economic expansion may find themselves waiting longer than expected.
