The United States Department of Justice has closed its investigation into Federal Reserve Chair Jerome Powell, removing a key obstacle to the confirmation of Kevin Warsh, President Donald Trump's preferred candidate to lead the central bank.

US Attorney Jeanine Pirro, the top federal prosecutor in Washington DC and a Trump ally, announced the closure of the probe, which had focused on cost overruns in renovations of the Fed's Washington headquarters. Pirro stated she had referred the matter to the Fed's internal watchdog, the Office of Inspector General (IG).

In a social media post, Pirro said: "The IG has the authority to hold the Federal Reserve accountable to American taxpayers. I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas."

The Powell probe had become a flashpoint in the Justice Department's pursuit of Trump adversaries and critics. Last month, a federal judge blocked subpoenas to the Fed's Board of Governors, ruling they were issued for the improper purpose of pressuring Powell to acquiesce to Trump's demand to lower interest rates or resign. Chief US District Judge James Boasberg found prosecutors had shown "essentially zero evidence" that Powell committed a crime.

Republican Senator Thom Tillis of North Carolina, a member of the Senate Banking Committee, had called the investigation "baseless" and vowed not to support Warsh's appointment until the DOJ dropped the charges. With the probe now closed, that obstacle has been removed, potentially paving the way for Warsh's confirmation.

Source: www.dw.com