US Justice Department ends criminal probe against Fed chair Powell

WASHINGTON - The US Justice Department dropped a criminal probe against Federal Reserve chair Jerome Powell on April 24, clearing the way for his replacement’s Senate confirmation amid concerns over President Donald Trump’s attacks on the independent central bank.

“I have directed my office to close our investigation,” US Attorney Jeanine Pirro announced on social media platform X.

Ms Pirro said the inspector-general for the Fed would instead look into renovation cost overruns at its headquarters, which the Justice Department had been probing – under heavy pressure from Mr Trump.

Mr Trump has upended Washington norms by routinely criticising the Fed for not following his calls to cut interest rates more rapidly, while making personal attacks on Mr Powell in particular.

The probe into Mr Powell, whose term expires on May 15, looked likely to hold up the Senate’s confirmation of Mr Trump’s pick for a new chairman.

Now, Ms Pirro’s announcement is likely to ease that path.

The Trump administration “remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman”, White House spokesman Kush Desai said soon after the Justice Department probe was dropped.

The investigation had been criticised by former Fed chiefs and lawmakers as an attempt to undermine the central bank’s independence from politics.

At Mr Warsh’s confirmation hearing this week before the Senate Banking Committee, Republican Senator Thom Tillis reiterated that he would continue blocking new appointments to the Fed if the Powell investigation were not resolved.

Mr Tillis’ vote against the appointment would have been enough to set up an impasse on the panel, which Mr Warsh needs to clear to become the next Fed chief. AFP