United States: Washington prosecutor drops charges against Fed chief

Jeanine Pirro announced the dropping of charges against Jerome Powell, the Fed president, for exceeding the renovation costs of its buildings.

The federal prosecutor in Washington, Jeanine Pirro, announced on Friday on her account the decision to drop the charges against Federal Reserve (Fed) President Jerome Powell regarding the exceeding of renovation costs for the central bank’s buildings. This decision removes a major obstacle to the confirmation by the U.S. Senate 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 remained under investigation.

According to Jeanine Pirro, “the Inspector General for the Fed was tasked with addressing the issue of costs related to renovation works.” “In these circumstances, I have instructed my office to end our investigation, as the Inspector General takes over,” she added. The Office of the Inspector General (OIG), which is under the board of governors of the Fed and the Consumer Financial Protection Bureau (CFPB), is specifically tasked with overseeing the daily activities of the U.S. central bank.

Market analysts do not expect a Fed rate cut. The dropping of charges against Jerome Powell is expected to allow the Senate to quickly vote on the confirmation of his successor, 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 Fed chairman remained under investigation that he deemed unjustified. The presidential majority holds in the Senate, and only one Republican member of the banking committee is enough to block Kevin Warsh’s nomination. During Kevin Warsh’s hearing before a Senate committee on Tuesday, Senator Tillis reminded everyone of the candidate’s record.

He served as a Fed governor from 2006 to 2011 and is a serious candidate in the eyes of Republicans – his qualifications were not in question, only the judicial procedure initiated with Donald Trump’s approval. As long as Kevin Warsh is not 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, with rising prices in the U.S. due to the Middle East conflict. The markets do not expect a Fed rate cut, currently ranging between 3.50% and 3.75%. The next rate cut might happen at the end of the year, at the soonest, according to CME’s FedWatch tool.