Post by : Badri Ariffin

The U.S. Justice Department has officially concluded its inquiry into Federal Reserve Chair Jerome Powell, eliminating a significant barrier for Kevin Warsh's confirmation as the next head of the Federal Reserve.

U.S. Attorney Jeanine Pirro announced the closure of the investigation related to the renovation project of the Federal Reserve's building. She indicated that this matter will now shift to a review by the Fed's inspector general.

This resolution is anticipated to expedite Warsh's confirmation in the Senate, particularly as Senator Thom Tillis had previously expressed reservations about Warsh's nomination pending the investigation's outcome.

No Evidence Found in Inquiry

The probe investigated a $2.5 billion renovation project at the Federal Reserve that faced scrutiny due to cost overruns, with initial estimates suggesting a budget of $1.9 billion.

However, prosecutors did not uncover any evidence of criminal activity. Judge James Boasberg asserted that there was "virtually zero evidence" against Powell, leading to the dismissal of subpoenas issued during the investigation.

Tensions Surrounding Fed's Policies

The investigation took place against a backdrop of ongoing discord between former President Donald Trump and the Federal Reserve. Trump has persistently advocated for lower interest rates, while the Fed has kept rates around 3.6% to mitigate inflation.

Powell had previously remarked that the investigation seemed tied to the Fed's independent choices regarding interest rates rather than the renovation concerns.

Warsh's Assurance of Independence

In his Senate confirmation hearing, Warsh maintained that Trump never sought any commitment from him regarding interest rate adjustments.

"The president never asked me to make any specific rate decision," Warsh stated, emphasizing his refusal to succumb to such pressures.

Nevertheless, Democrats, including Senator Elizabeth Warren, voiced apprehensions about Warsh's independence and transparency in financial dealings.

With the investigation's conclusion, the Senate is poised to advance towards a vote on Warsh's confirmation shortly. Powell's tenure as Fed chair wraps up on May 15, although he could continue serving on the board until 2028.

This development signifies a pivotal shift for U.S. monetary policy, potentially heralding a change in leadership at the Federal Reserve amid ongoing economic volatility.

#world news #Global News #World Update #Global Updates