Trump’s DOJ drops case against Jerome Powell to clear the way for Kevin Warsh as Fed chair

The president’s choice to lead the Fed, Kevin Warsh, faces a key obstacle for his confirmation in the Senate, where Republican Thom Tillis vowed to vote against his nomination unless the Justice Department backed off the probe.U.S. Attorney for Washington, D.C. Jeanine Pirro announced Friday that she has directed her office to close the investigation.She said the office of Inspector General for the Federal Reserve has instead taken up an investigation into building cost overruns.“The IG has the authority to hold the Federal Reserve accountable to American taxpayers,” she said. “I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas.” She said she will “not hesitate to restart a criminal investigation should the facts warrant doing so.” Powell has denied any wrongdoing. In his first public hearing this week before a confirmation vote, Warsh faced several rounds of questions from members on the Senate Banking Committee about his loyalty to the president as Trump looks to reshape the Fed. Warsh denied that his nomination hinged on the president’s demands to lower interest rates and repeatedly dodged questions about Trump’s politicized overhaul of the central bank. Tillis, who has repeatedly criticized the investigation into Powell, signaled that he’s more than willing to support Warsh’s nomination if the Justice Department were to drop it altogether. “If we put everybody in prison in federal government that had had a budget go over, we’d have to reserve an area roughly the size of Texas for a penal colony,” Tillis said during Tuesday’s hearing. “The problem that I have here is that we had some U.S. attorney … thinking it would be cute to bring Chair Powell under an investigation just a few months before the position was going to be open.” He urged the administration to “get rid of this investigation so I can support your nomination.”