Jeanine Pirro announced the dropping of charges against Jerome Powell, the Fed president, for exceeding the renovation costs of his buildings.
The federal prosecutor for Washington, Jeanine Pirro, announced on Friday on her account the dropping of charges against the Federal Reserve (Fed) President, Jerome Powell, regarding the exceeding renovation costs of the central bank’s buildings. This decision removes a major obstacle to the U.S. Senate’s confirmation of Donald Trump’s nominee to succeed Jerome Powell, Kevin Warsh, whom a Republican senator refused to vote for as long as the Fed president was under investigation.
According to Jeanine Pirro, “The Inspector General for the Fed was tasked with looking into the issue of cost overruns related to renovation work. In these conditions, I have ordered my office to end our investigation, as the Inspector General takes over,” she added. The Office of the Inspector General (OIG), which reports to the Fed’s board of governors and the Consumer Financial Protection Bureau (CFPB), is specifically tasked with monitoring the daily activities of the U.S. central bank.
The markets do not expect a Fed rate cut
The dropping of charges against Jerome Powell should allow the Senate to quickly vote on confirming his successor’s candidacy, as the current president’s term ends in mid-May. Republican Senator Thom Tillis had announced that he would not vote for Kevin Warsh as long as the current head of the Fed was under investigation, which he deemed unjustified. The presidential majority holds in the Senate, and only one Republican member of the banking committee is enough to block the nomination of Kevin Warsh. During Kevin Warsh’s hearing before a Senate committee on Tuesday, Senator Tillis recalled the candidate’s service record.
He served as one of the governors of the Fed from 2006 to 2011 and is considered a serious candidate in the eyes of Republicans – his qualifications were not in question, only the legal proceedings initiated with Donald Trump’s approval. Until Kevin Warsh is confirmed, Jerome Powell can remain at the helm of the Fed. He will preside over what could be his last Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday, in a context where the conflict in the Middle East has driven prices up in the United States. The markets do not anticipate a Fed rate cut, currently ranging between 3.50% and 3.75%. The next cut could come at the earliest by the end of the year, according to CME’s FedWatch tool.
