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The Department of Justice concluded its criminal inquiry into Federal Reserve Chair Jerome Powell on Friday, clearing the final significant hurdle for Senate confirmation of Kevin Warsh as the central bank’s prospective chief — a development with implications for financial policy and Bitcoin.
U.S. Attorney for the District of Columbia Jeanine Pirro announced the termination of the investigation, which had been initiated regarding alleged cost overruns on a $2.5 billion refurbishment of the Fed’s Washington headquarters.
Pirro stated she was forwarding the matter to the Fed’s own inspector general, requesting “a thorough report shortly.” She did not rule out the possibility of recommencing criminal proceedings if deemed appropriate.
The inquiry lacked a legal basis. A federal judge, James Boasberg, invalidated DOJ subpoenas in March after a prosecutor admitted the government had found “virtually no evidence” of wrongdoing, characterizing the justification as “weak and unverified.” Powell himself characterized the probe as a political instrument, asserting in January that it was “a result of the Federal Reserve establishing interest rates based on our best judgment of what will serve the public, rather than adhering to the President’s preferences.”
A ‘Baseless’ Examination of Powell
Senator Thom Tillis, a North Carolina Republican serving on the Senate Banking Committee, had pledged to obstruct Warsh’s confirmation until the examination concluded, labeling it “bogus.” His objection, coupled with unanimous Democratic opposition, had impeded the nomination. With the inquiry now concluded, leadership anticipates a rapid committee vote and floor approval before Powell’s tenure ends on May 15.
Warsh, 56, a former Fed governor and Stanford faculty member, testified before the Senate Banking Committee on Tuesday, promising “unwavering independence” from the White House concerning rate determinations. “The president never once asked me to commit to any particular interest rate decision, period,” Warsh stated.
Senator Elizabeth Warren described him as a “stooge” for Trump, while Republicans commended his credentials.
For Bitcoin, the implications are considerable. The digital currency has fluctuated in the $70,000–$92,000 range this year as the Fed maintained stable rates at 3.5%–3.75%, with market participants closely monitoring every indication from the central bank.
Diminished interest rates historically decrease returns on traditional investments, redirecting capital toward speculative assets like Bitcoin. When the DOJ initially launched its investigation in January, Bitcoin surged towards $92,000 as institutional investors interpreted the assault on the Fed as a menace to dollar confidence and a potential trigger for interest rate reductions.
Warsh is regarded as more aggressive on inflation than Powell, having labeled the Fed’s post-pandemic rate strategy as “the most significant policy misstep in 40 or 50 years.”
If he assumes leadership on May 15 and upholds a restrictive posture, Bitcoin proponents anticipating liquidity expansion driven by rate cuts might face a longer wait than foreseen.
Learn more at : bitcoinmagazine.com