Senator Thom Tillis of North Carolina has signaled a significant shift regarding the confirmation of Kevin Warsh as the next chairman of the Federal Reserve. In light of the U.S. Department of Justice’s recent decision to terminate its criminal investigation into current Fed Chair Jerome Powell, Tillis is now prepared to end his blockade of Warsh’s nomination. This development clears the way for a timely confirmation process as Powell’s term is set to expire in mid-May.
During an appearance on NBC’s “Meet the Press,” Tillis expressed his support for Warsh, stating, “I am prepared to move on with the confirmation of Mr. Warsh, I think he’s going to be a great Fed chair.” He elaborated that reassurances from the DOJ were crucial in alleviating concerns over the potential misuse of investigations to undermine the Fed’s independence. The Senate Banking Committee is scheduled to vote on Warsh’s confirmation on Wednesday, with the expectation that the full Senate may take action shortly thereafter. Tillis’s support is vital, as the committee comprises 13 Republicans and 11 Democrats; any defection among Republicans could lead to a deadlock.
The DOJ had been investigating Powell over alleged cost overruns tied to renovations at the Federal Reserve building. Following U.S. Attorney Jeanine Pirro’s announcement that the investigation would be transferred to the Fed’s inspector general, Tillis received confirmation from DOJ officials that the investigation was effectively concluded. He mentioned, “The only way an investigation would be opened would be a criminal referral from the IG,” signaling his resolution to support Warsh now that concerns have been addressed.
Acting Attorney General Todd Blanche, also appearing on “Meet the Press,” stated that the investigation is currently in the hands of the inspector general, and should any evidence of criminal conduct arise, the DOJ would proceed with an investigation. Meanwhile, Tillis noted that Pirro’s office is planning to appeal a federal judge’s ruling that quashed subpoenas issued to the Fed, though he reassured that the appeal would focus on legal principles rather than reissuing subpoenas.
In terms of Warsh’s future agenda, he is expected to implement substantial changes at the Fed if confirmed. During his confirmation hearing on Tuesday, Warsh stated his desire for a “regime change” and proposed alterations in how the Fed measures inflation and communicates its policies. He is likely to advocate for interest rate cuts, but this would require persuading fellow members of the Federal Open Market Committee, especially given rising energy prices linked to geopolitical tensions, such as the ongoing war in Iran.
As for Powell, despite the conclusion of his term as chair, he can continue as a voting member of the Fed’s board until January 2028, a decision he has indicated he intends to pursue while the specter of prosecution looms over him. Powell is anticipated to address these matters during the Fed’s upcoming press conference.
