DOJ Drops Powell Probe, Boosting Pro-Crypto Warsh’s Fed Chair Confirmation Odds

The U.S. Department of Justice (DOJ) has dropped the Jerome Powell probe regarding the Federal Reserve building costs. This is significant, as it could clear the way for the U.S. Senate to confirm pro-crypto Kevin Warsh as the next Fed chair, even before Powell’s term ends next month.

DOJ Drops Powell Probe, Clearing Way For Kevin Warsh’s Confirmation

In an X post, U.S. Attorney Jeanine Pirro announced that they have closed the investigation into the Federal Reserve’s building cost overruns, as the Inspector General for the Federal Reserve undertakes this inquiry. “Note well, however, that I will not hesitate to restart a criminal investigation should the facts warrant doing so,” she added.

This development comes months after the DOJ first launched the Powell probe over the Fed chair’s congressional testimony about the Fed’s renovation costs. At the time, Powell had accused the DOJ of launching the investigation because the FOMC refused to lower rates in line with U.S. President Donald Trump’s preference.

More recently, the Fed chair had said he won’t leave the Fed Board until the DOJ concludes the probe into him. As CoinGape reported, Trump vowed to fire Powell if he didn’t resign from the board after his term as Fed chair expires on May 15.

Meanwhile, the move to drop the Powell probe is also significant as Senators such as Thom Tillis had pledged not to support Kevin Warsh’s Fed chair confirmation until the DOJ dropped the probe into Powell. As such, with the investigation dropped, Warsh’s confirmation could happen sooner than expected.

Kevin Warsh’s Confirmation Odds Jump

The odds of the Senate confirming Warsh by May 15, when Powell’s term expires, rose sharply following the DOJ’s announcement that it would drop the Powell probe. According to Polymarket data, the odds of a Warsh confirmation by May 15 now stand at 75%, rising from as low as 28% today.

It is worth noting that Warsh’s confirmation hearing before the Senate Banking Committee held earlier this week, where the Fed chair nominee vowed Fed independence despite Trump’s push for rate cuts. Following the drop into the Powell probe, the White House expressed confidence that the Senate will swiftly confirm Warsh as the next Fed chair.

Punchbowl’s Brendan Pedersen noted that the Senate Banking Committee now has enough time to notice Warsh’s committee vote late next week. “That will make it possible, but not certain, Warsh is confirmed before May 15, Powell’s end date,” he noted. Warsh’s potential confirmation as the next Fed chair by May 15 means next week’s FOMC meeting is likely to be Powell’s last as chair.