American justice ends proceedings against Fed boss

American justice closes a critical case which weighed on the Federal Reserve. By dropping the charges against Jerome Powell, she puts an end to a controversial investigation into $2.5 billion work and dissipates an unprecedented climate of tension between political power and monetary authority. As his departure approaches, the Fed president leaves the scene without condemnation, while this decision unblocks a hitherto paralyzed succession and rekindles questions about the real independence of the institution.

A judicial investigation finally abandoned

While the Senate will have to validate the nomination of Kevin Warsh, the federal prosecutor in Washington, Jeanine Pirro, announced the abandonment of criminal proceedings against Jerome Powell, putting an end to an investigation into suspicions of mismanagement linked to renovation work on historic Fed buildings, the total cost of which would reach $2.5 billion.

This decision comes after several legal setbacks for the prosecution, including when federal Judge James Boasberg rejected requests for documents, finding that authorities provided essentially no evidence of an offense.

In this context, Jerome Powell himself denounced a procedure based on “pretext”pointing to an attempt to interfere in the action of the central bank. Judge Boasberg reinforced this reading by mentioning “abundant evidence” suggesting that the real objective of the prosecution was to “harass and pressure” on the chairman of the Fed. The case is now relegated to a simple internal examination entrusted to the inspector general, without criminal dimension.

• Prosecutor Jeanine Pirro officially ends criminal proceedings against Jerome Powell;
• The investigation covered renovation work estimated at $2.5 billion;
• Judge James Boasberg discusses “essentially no evidence” of infringement;
• Jerome Powell calls the investigation “pretext” ;
• The judge mentions “abundant evidence”attempt to “harass and pressure”;
• The file is transformed into a simple internal examination without criminal significance.

A political transition now unlocked at the Fed

The dropping of charges also has direct consequences on the governance of the Federal Reserve. The nomination of Kevin Warsh, chosen to succeed Jerome Powell, was until now blocked in the Senate. Republican Senator Thom Tillis refused to support the nomination while the investigation remained active, creating institutional uncertainty as the end of Powell's term approached. With the disappearance of this political obstacle, the confirmation process should now accelerate.

This change comes in a context of strong tensions between the White House and the Fed. Donald Trump has increased his criticism of Jerome Powell, accusing him of not having lowered interest rates more aggressively. Kevin Warsh, for his part, defended an approach more aligned with the economic objectives of the current administration, evoking strengthened cooperation with the executive. This orientation could mark a shift in the conduct of American monetary policy.

In this context of monetary transition, bitcoin stands out as an alternative. Any evolution of the Fed influences its trajectory, strengthening its role in the face of economic uncertainties.

The end of this legal drama thus opens a new phase for the Fed, between institutional continuity and strategic repositioning. If Jerome Powell's image is preserved, the appointment of his successor, despite political obstacles, will be closely scrutinized by the markets, which will have to assess the impact of a possible redefinition of the relationship between political power and monetary authority.