U.S. DOJ Halts Powell Probe, Clearing the Way for Waller Confirmation

[Financial News, New York = Reporter Lee Byung-chul]The United States Department of Justice (DOJ) has abruptly halted its criminal investigation into Jerome Hayden Powell, chairman of the Federal Reserve System (Fed), raising expectations that the Senate confirmation process for Kevin Warsh, nominated by President Donald John Trump, will move ahead quickly. The clash between political leaders and the central bank is flaring up again over interest rates and Fed independence.
According to foreign media reports on the 24th local time, Jeanine Pirro, who leads the United States Attorney's Office for the District of Columbia, said the criminal probe into Powell had been closed. The move is significant because it removes a legal risk that had been a key variable in the Senate confirmation process. Powell had been under investigation over allegations of excessive spending on renovations at the Fed headquarters.
With the probe now dropped, the confirmation process that had been stalled even within the Republican Party (GOP) is likely to resume. Senator Thom Tillis had previously said he would block a confirmation vote on Warsh if the investigation continued.
The timing has also drawn political attention, as the decision came just three days after Warsh appeared before the United States Senate Committee on Banking, Housing, and Urban Affairs. The White House also expressed confidence, saying that the Senate would move quickly on confirmation.
Interpretations of the core issue remain sharply divided. Powell's side has argued that the investigation was effectively part of pressure to cut interest rates. Since President Trump has repeatedly urged the Fed to lower rates, they say the administration tried to influence monetary policy through legal pressure.
Prosecutors, however, cited the cost overruns in the renovation of the Fed headquarters and Powell's congressional testimony as the basis for the probe. Going forward, the review will be handled by the Federal Reserve Inspector General, and the findings are expected to be made public to Congress and the public. Still, Pirro left the door open, saying, "If necessary, we can reopen the criminal investigation at any time."
Political backlash followed immediately. Tim Scott of the Republican Party stressed the need to end the probe and hand the matter over to Congress, urging a return to normal confirmation procedures. He described Powell as "not a criminal, but incompetent."
Elizabeth Ann Warren of the Democratic Party strongly pushed back, calling it "a move to clear the path for Warsh's confirmation." She criticized the idea that Trump's attempt to take control of the Fed was over, saying, "It is a mistake to think Trump's effort to seize the Fed has ended."
The issue is expanding beyond a simple personnel matter into a structural conflict over Fed independence and the direction of monetary policy. In particular, with President Trump continuing to pressure the central bank to cut rates, concerns are resurfacing that monetary policy could become increasingly politicized as the next Fed chair selection takes shape. Markets are watching closely to see whether Warsh is confirmed and whether the Fed's policy direction becomes a key driver of financial market volatility.



[email protected] Reporter Lee Byung-chul Reporter