A decision by U.S. District Attorney Jeanine Pirro to drop a criminal probe into the Federal Reserve potentially clears a path for President Donald Trump¡¯s nominee to take over the central bank. What it won¡¯t do is secure the current Fed chair¡¯s departure.
Jerome Powell has pledged to remain at the U.S. central bank until the Department of Justice probe, related to cost overruns in a building renovation, is completed "with transparency and finality.¡± It¡¯s not clear that Pirro¡¯s move, which defers the investigation to the Fed¡¯s own Office of Inspector General, will meet that test. When announcing the decision Friday, Pirro also said she would "not hesitate to restart a criminal investigation should the facts warrant doing so.¡±
That suggests continued pressure from the Trump administration that could motivate Powell to stay at the Fed even if the president¡¯s nominee to replace him, Kevin Warsh, is confirmed by the Senate. While Powell¡¯s term as chair ends on May 15, his seat on the Board of Governors doesn¡¯t expire until 2028.
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