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Republican Senator Drops Opposition to Trump’s Fed Chair Pick After DOJ Ends Powell Investigation
Republican Senator Thom Tillis of North Carolina announced Sunday that he is withdrawing his opposition to President Donald Trump’s nominee to lead the Federal Reserve, clearing a significant hurdle for former Fed official Kevin Warsh to replace Jerome Powell as the central bank’s chair.
The shift comes after the Department of Justice concluded its investigation into Powell regarding the Federal Reserve’s headquarters renovation project, which has faced scrutiny for ballooning costs. The project’s price tag has grown from an initial estimate of $1.9 billion to $2.5 billion, drawing criticism from Trump.
“I am prepared to move on with the confirmation of Mr. Warsh. I think he’s going to be a great Fed chair,” Tillis told NBC’s “Meet the Press.” His opposition had previously stalled the nomination in the Republican-controlled Senate Banking Committee as Powell approaches the scheduled end of his term on May 15.
Tillis, who announced earlier that he would not seek reelection in 2026, had been vocal about protecting the Fed’s independence. He characterized the inquiry by U.S. Attorney Jeanine Pirro, a Trump ally, as a “vindictive prosecution” that threatened the central bank’s long-established autonomy from political influence.
The senator indicated he received assurances from the Justice Department that “the case is completely and fully settled,” and that a new investigation would only open following a criminal referral from the inspector general. This satisfied his concerns about the DOJ being used “as a weapon to threaten the independence of the Fed.”
The Senate Banking Committee has scheduled a vote on Warsh’s nomination for Wednesday. However, the ranking Democrat on the committee, Massachusetts Senator Elizabeth Warren, expressed strong opposition. In a statement, Warren claimed that “no Republican claiming to care about Fed independence should support moving forward the nomination of Kevin Warsh, who proved in his nomination hearing to be nothing more than President Trump’s sock puppet.”
At his confirmation hearing last week, Warsh attempted to dispel concerns about his independence, telling senators he never promised the White House he would cut interest rates and pledging to be “an independent actor” if confirmed. His statements came just hours after Trump told CNBC he “would” be disappointed if Warsh did not immediately lower rates.
The Justice Department investigation was one of several aimed at Trump’s perceived adversaries. Last month, a federal judge quashed Justice Department subpoenas issued to the Fed, describing their purpose as “to harass and pressure Powell to resign” and clear the way for a new chair. A prosecutor involved in the case acknowledged at a closed-door court hearing that the government “had not found any evidence of a crime.”
Despite the investigation’s conclusion, U.S. Attorney Pirro stated on social media platform X that she “will not hesitate to restart a criminal investigation should the facts warrant doing so.” Acting Attorney General Todd Blanche echoed this sentiment, telling NBC that “there is no doubt that we will investigate” if the inspector general finds evidence of criminal conduct.
The Fed’s renovation project has been a particular point of contention. In July, Trump visited the Fed building and claimed in front of cameras that renovations would cost $3.1 billion. Powell, standing beside him, disputed this figure after reviewing documentation presented by the president. Powell had previously requested the inspector general’s review of the project in July.
Trump originally appointed Powell as Fed chair in 2017 but has since sought to pressure the central bank to cut short-term interest rates. Even after a new chair is installed, Powell could potentially remain on the Federal Reserve Board to complete his term as a governor, which extends until January 2028. He has not yet announced whether he plans to do so.
Warsh, a financier and former member of the Fed’s board of governors, was nominated by Trump in January. With Tillis’s opposition now removed, his path to confirmation appears clearer, though the full Senate will still need to vote on his appointment following the committee’s decision.
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9 Comments
Protecting the Fed’s independence is crucial, so I’m curious to hear more about Tillis’ perspective on Warsh’s nomination. Given the political dynamics, this decision could have significant implications for the central bank’s future direction.
Agreed, the independence of the Fed is paramount. Tillis’ withdrawal of opposition suggests he believes Warsh can maintain that independence, but it will be important to monitor how the confirmation process unfolds.
The rising costs of the Fed’s headquarters renovation project have been a source of controversy, so it’s understandable that Tillis wanted to thoroughly investigate the matter. The DOJ’s conclusion appears to have satisfied his concerns, allowing him to move forward with Warsh’s confirmation. This will be an important transition to monitor.
Warsh’s nomination to lead the Federal Reserve is a significant development. Given his prior experience at the central bank, his policy views and approach to monetary policy will be closely scrutinized. It will be interesting to see how the confirmation process unfolds and what it means for the future direction of the Fed.
The transition in Fed leadership is an important economic event. While the investigation into Powell appears to have been resolved, the broader context around Warsh’s nomination will be closely watched. Investors and analysts will be keen to understand Warsh’s policy leanings and how he might steer the central bank.
This is a significant shift in the confirmation process for the next Fed chair. Tillis’ previous opposition had stalled the nomination, so his change of stance could pave the way for Warsh’s confirmation. However, it will be crucial to ensure the Fed’s independence is preserved, regardless of who leads the institution.
This is an interesting development regarding the Federal Reserve leadership. While protecting the Fed’s independence is important, it seems Senator Tillis is now ready to move forward with confirming Warsh as the new chair. I wonder what factors led to this change of position.
The DOJ’s conclusion of its investigation into Powell appears to be a key factor in Tillis’ decision. It will be important to see how Warsh’s nomination process unfolds from here.
The rising costs of the Fed’s headquarters renovation project have been a point of contention. It’s good to see that the DOJ inquiry has been resolved, allowing the confirmation process to move forward. Warsh’s experience at the Fed will likely be valuable, but his policy views will be closely scrutinized.