Sen. Thom Tillis (R-N.C.) announced Sunday he will support President Donald Trump’s nominee Kevin Warsh to lead the Federal Reserve, ending his blockade of the confirmation process. Tillis cited assurances from the Department of Justice (DOJ) that its investigation into Federal Reserve Chair Jerome Powell over cost overruns in the renovation of the Fed’s headquarters has been fully closed.
Immediate Action & Core Facts
Tillis, who had previously vowed to oppose any of Trump’s Fed nominees due to the DOJ probe, reversed course after U.S. Attorney Jeanine Pirro closed the investigation. He stated on NBC’s ‘Meet the Press’ that he is now prepared to move forward with Warsh’s confirmation, calling him ‘a great Fed chair.’ The Senate Banking Committee is set to vote on Warsh’s nomination next week.
Deeper Dive & Context
Background on the DOJ Investigation
The DOJ had been investigating Powell over allegations of lying to Congress about the cost of renovating the Federal Reserve’s headquarters, which reportedly ballooned to $3.1 billion. Republican Rep. Anna Paulina Luna referred Powell to the DOJ in July, alleging misconduct. The investigation’s closure was a key factor in Tillis’s decision to support Warsh.
Tillis’s Rationale
Tillis emphasized that the DOJ’s assurances were critical to his decision. He stated that the investigation’s closure, along with guarantees that any appeal would not reopen the case, removed concerns about the Fed’s independence. He also noted that only a criminal referral from the inspector general could reopen the probe.
Powell’s Stance
Current Fed Chair Jerome Powell, whose term as chairman expires on May 15 but continues as a governor until 2028, had previously stated he would not leave his post while the investigation was ongoing. With the probe closed, the path is now clear for Warsh’s confirmation.
Political Implications
Tillis’s support is crucial for Warsh’s advancement, as the Senate Banking Committee is evenly divided, with 13 Republicans and 11 Democrats. His reversal ensures Warsh’s nomination will likely proceed without a deadlock. The confirmation process is expected to move forward swiftly, allowing the Fed to focus on its core mission.
Broader Context
The Fed has faced scrutiny over its monetary policy, particularly from Trump, who has criticized Powell for not lowering interest rates quickly enough. Warsh, a former Fed governor, is seen as a potential ally for Trump’s economic agenda. The confirmation process will now proceed without the shadow of the DOJ investigation, which had raised concerns about political interference in the Fed’s independence.