By Zoey
Republican Senator Thom Tillis said Sunday he will no longer stand in the way of the Senate confirmation process for Federal Reserve chair nominee Kevin Warsh, clearing a significant political hurdle after the Department of Justice moved to end its investigation into current Fed Chair Jerome Powell.
Tillis had previously pledged to block any nominee to lead the Federal Reserve as long as the investigation into Powell remained active, arguing that it posed a direct threat to the central bank’s independence from political influence. With the inquiry now closed, the North Carolina senator said he is ready to proceed.
“I am prepared to move on with the confirmation of Mr. Warsh,” Tillis said during an appearance on NBC’s “Meet the Press,” adding that he believes Warsh would serve effectively as head of the central bank.
The shift effectively ends months of uncertainty surrounding Warsh’s nomination and sets the stage for a Senate vote expected before May 15, when Powell’s current term as chair is scheduled to expire. The timeline remains tight, however, given the limited number of legislative days remaining and a planned Senate recess.
The controversy stemmed from a Justice Department investigation disclosed by Powell in January, focusing on his oversight of a $2.5 billion renovation project involving two Federal Reserve buildings in Washington. Powell sharply criticized the probe at the time, characterizing it as an attempt to pressure the Fed into altering its monetary policy stance, particularly on interest rates.
Legal challenges soon followed. In March, a federal judge blocked subpoenas issued as part of the investigation, concluding they had been pursued for an improper purpose—namely to influence Powell’s decisions or compel his resignation. Despite the ruling, U.S. Attorney Jeanine Pirro initially indicated plans to continue pursuing the case and appeal the decision.
That position changed on Friday, when Pirro announced she would end the investigation and instead defer to the Federal Reserve’s internal watchdog. The central bank’s inspector general, already conducting a separate review of the renovation project, will now take the lead in examining the matter.
Tillis said he had received assurances from the Justice Department that the case was fully resolved and would not be revived through appeal or other means. In a subsequent post on social media, he described the inspector general’s review as an appropriate channel for oversight and said he was confident it would be handled professionally.
The senator emphasized that his earlier objections were not directed at Warsh personally. During the nominee’s confirmation hearing, Tillis described Warsh’s qualifications as “impeccable,” signaling that his opposition was rooted in broader institutional concerns rather than doubts about the nominee’s credentials.
Warsh, who served as a Federal Reserve governor from 2006 to 2011, has outlined plans to reshape the central bank’s approach to monetary policy if confirmed. He has suggested a greater degree of coordination with other parts of the federal government on issues outside the Fed’s core mandate, while maintaining that political pressure would not dictate policy decisions.
At his hearing, Warsh told lawmakers that former President Donald Trump did not seek any commitment from him regarding interest rates. He also downplayed concerns that tariffs have significantly contributed to inflation, and questioned whether current metrics used by policymakers may be overstating price pressures.
With Tillis now backing the nomination, Republicans on the Senate Banking Committee are positioned to advance Warsh’s candidacy despite unified Democratic opposition. The full Senate is widely expected to confirm him, given the party’s majority.
The compressed timeline presents logistical challenges. Historically, the Senate has rarely confirmed a Federal Reserve nominee in less than three weeks, raising the possibility that Powell could remain in a temporary leadership role if the process extends beyond mid-May.
Powell has indicated he is prepared to continue serving as chair on an interim basis if necessary. Even after stepping down from the top role, he could remain on the Federal Reserve Board, where his term as a governor runs for another year and a half.
“I have no intention of leaving the Board until the investigation is well and truly over, with transparency and finality,” Powell said last month, underscoring his desire for a clear resolution to the scrutiny surrounding the renovation project.
Despite the Justice Department’s decision to step aside, uncertainty has not been entirely eliminated. Pirro said the possibility remains that the investigation could be revisited depending on the findings of the inspector general’s review.
That prospect drew immediate criticism from Senate Democrats, including Elizabeth Warren and Dick Durbin, who warned that the suggestion of renewed inquiries could amount to a continued threat against Federal Reserve officials.
The episode has highlighted ongoing tensions between political authorities and the central bank, with lawmakers from both parties closely watching how the transition in leadership unfolds in the weeks ahead.
Original article
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