WASHINGTON — Senator Thom Tillis, R-N.C., has signaled his readiness to proceed with the confirmation of Kevin Warsh as the next Federal Reserve chair, a significant development that removes a key obstacle to President Donald Trump’s nominee. Tillis, who had effectively stalled Warsh’s advancement in the Senate Banking Committee, announced his decision to drop his opposition after the Department of Justice concluded its investigation into current Fed Chair Jerome Powell.
The announcement by Tillis, made on NBC’s ‘Meet the Press,’ comes just days after the U.S. attorney for the District of Columbia stated that her office’s probe into the Federal Reserve’s multibillion-dollar building renovations had ended. Powell’s testimony last summer concerning this extensive project, which has seen cost estimates rise from an initial $1.9 billion to $2.5 billion, had also been under review.
Tillis expressed his belief that Warsh would be an effective leader for the central bank. ‘I am prepared to move on with the confirmation of Mr. Warsh. I think he’s going to be a great Fed chair,’ Tillis stated. He elaborated on his concerns regarding the investigation into Powell, suggesting it was potentially being used as leverage to force Powell out of his position prematurely. ‘I believe that there will not be any wrongdoing. Maybe we find a little stupid here in terms of somebody responsible for the project making a decision they shouldn’t? Maybe. But it doesn’t rise to a criminal prosecution. That was my problem to begin with because I feel like there were prosecutors in D.C. that thought this was going to be a lever to have Mr. Powell leave early,’ Tillis said.
The North Carolina Republican, who has been outspoken about the Fed’s independence from political pressure, particularly after his opposition to a major tax and spending bill in June and his subsequent announcement that he would not seek reelection in 2026, indicated he had received assurances from the Justice Department. These assurances, he stated, confirmed that ‘the case is completely and fully settled … and that the only way an investigation would be opened would be a criminal referral from one of the most respect inspector generals.’
The Senate Banking Committee has scheduled a vote on Warsh’s nomination for Wednesday. This move clears a major hurdle for Trump, who has been vocal in his desire for the Fed to lower interest rates. Warsh, a former high-ranking Fed official, faces scrutiny over his potential alignment with the White House’s monetary policy preferences.
Ranking Democrat Sen. Elizabeth Warren of Massachusetts voiced strong opposition to moving forward with Warsh’s nomination. ‘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,’ Warren said in a statement.
The Federal Reserve’s policy-setting Federal Open Market Committee (FOMC) is also scheduled to meet this week, with expectations that they will maintain the current key interest rate for a third consecutive meeting, defying President Trump’s calls for a reduction. Following the FOMC meeting, Fed Chair Powell is expected to hold a press conference. Analysts will be watching closely for any indications regarding his future on the Fed’s board of governors after his term as chair concludes on May 15. While unusual, a governor remaining on the board after stepping down as chair is not unprecedented and would allow Powell to continue serving until his term as a governor expires in January 2028, thereby denying Trump an additional appointment to the seven-member board.
During his nomination hearing last week, Warsh asserted that he had not promised the White House any specific actions on interest rates and pledged to act as ‘an independent actor’ if confirmed. This statement came shortly after President Trump, in a CNBC interview, expressed his desire for Warsh to cut rates immediately, stating, ‘I would.’
Tillis had previously characterized the inquiry into Powell by U.S. Attorney Jeanine Pirro, described as a Trump ally, as a ‘vindictive prosecution’ that threatened the Fed’s long-standing independence. He reiterated that the assurances received from the Justice Department were crucial for him to ‘feel like they were not using DOJ as a weapon to threaten the independence of the Fed. So this will allow Mr. Warsh to move on with his confirmation.’
President Trump, when asked by reporters about Warsh’s nomination prospects following the DOJ’s announcement, expressed optimism. ‘I imagine it’s smooth,’ Trump said, adding that his nominee ‘is going to be fantastic.’ He also reiterated his concern about the escalating costs of the Fed’s building renovations, noting, ‘The president said he still wanted to find out ‘how can a building of that size cost … whatever it’s going to be.” Trump had publicly questioned the project’s cost during a visit to the Fed building in July, citing a figure of $3.1 billion, which Powell had corrected at the time.
The investigation into Powell was part of a broader pattern of Justice Department actions that critics argued targeted perceived adversaries of the Trump administration. For months, the investigation struggled to establish a clear basis for criminal conduct. A federal judge had previously quashed Justice Department subpoenas related to the probe, describing their intent as an effort ‘to harass and pressure Powell to resign’ and clear the way for a new Fed chair. A prosecutor involved in the case had reportedly acknowledged in a closed-door hearing that no evidence of a crime had been found.
U.S. Attorney Pirro stated on X that she ‘will not hesitate to restart a criminal investigation should the facts warrant doing so.’ Acting Attorney General Todd Blanche told NBC on Sunday that ‘there is no doubt that we will investigate’ if the inspector general uncovers evidence of criminal conduct. Warsh, a financier and former Federal Reserve governor, was nominated by President Trump in January.
With Senator Tillis now signaling his support, the path for Kevin Warsh’s confirmation as the next Federal Reserve chair appears significantly clearer. The focus now shifts to the Senate Banking Committee vote and the broader implications for the Fed’s monetary policy independence under potential new leadership, particularly in light of President Trump’s persistent calls for lower interest rates.
