The Department of Justice ended its criminal investigation into Federal Reserve Chair Jerome Powell on Friday, removing a key obstacle that had blocked Senate action on Kevin Warsh's nomination as the next central bank leader.
The DOJ probe centered on alleged cost overruns during a $2.5 billion renovation of the Fed's Washington headquarters. North Carolina Republican Thom Tillis, who serves on the Senate Banking Committee, had vowed to block any confirmation vote until investigators closed the case, calling the probe "bonus."
Warsh, 56, served as a Fed governor from 2006 to 2011 and earlier worked as special assistant to the president for economic policy. The Stanford professor's nomination has drawn sharp opposition from Senator Elizabeth Warren (D-MA), who called him a "sock puppet" for Trump during Banking Committee proceedings.
Warren warned that "having a sock puppet in charge of the Fed would also give the president access to the Fed's powerful authorities to enrich himself, his family, and his Wall Street buddies." She cited concerns about "granting special accounts to his family's crypto company or bailouts to his friends on Wall Street if they get into trouble."
The nominee has criticized the Fed's pandemic-era monetary expansion as "the biggest policy error in 40 or 50 years." Powell, defending Fed independence in previous testimony, described presidential criticism of rate decisions as "a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President."
