Tillis greenlights Warsh Fed nomination after Powell probe ends

Republican Senator Thom Tillis has announced he will allow the Senate confirmation process for Federal Reserve chair nominee Kevin Warsh to proceed. This decision follows the Department of Justice’s recent termination of an investigation into current Federal Reserve Chair Jerome Powell, a move that removes a significant hurdle for the nominee.

Senator Tillis, a Republican from North Carolina, stated on NBC’s Meet the Press that he is prepared to move forward with Warsh’s confirmation. Tillis expressed his belief that Warsh would be an excellent Federal Reserve chair, citing his past experience and economic acumen. The senator had previously indicated he would block any nominee for the Federal Reserve leadership while the Justice Department’s probe into Chair Powell was active, underscoring the political sensitivity surrounding the nomination process. His change of stance signals a clear path forward for Warsh.

The Justice Department officially ended its criminal investigation into Jerome Powell on Friday, a development widely anticipated given recent legal challenges to the probe. U.S. Attorney Jeanine Pirro announced the decision on a social media platform, stating that the matter would be handed over to the Federal Reserve’s inspector general, who has been conducting an independent review for several months. This transfer ensures continued oversight, albeit through an internal mechanism rather than a criminal investigation.

This development clears the way for Kevin Warsh’s confirmation ahead of May fifteen, when Chair Powell’s term concludes. Warsh served as a Federal Reserve governor from two thousand six to two thousand eleven, a period that included the global financial crisis, providing him with extensive experience in economic policy. He has indicated plans to reform the Federal Reserve’s monetary policy approach, potentially shifting towards a more transparent or rules-based framework, and enhance cooperation with other government bodies on non-monetary policy issues, such as financial stability and regulatory oversight.

The investigation into Jerome Powell began in January, focusing on his oversight of a two point five billion dollar renovation project involving two Federal Reserve buildings in Washington, D.C. Powell publicly characterized the probe as an act of intimidation and an attempt by the Trump administration to pressure the Federal Reserve into lowering interest rates, raising concerns about the independence of the central bank. A federal judge in March had previously blocked the Justice Department’s subpoenas related to the investigation, citing improper purpose, a ruling that significantly weakened the department's case and foreshadowed its eventual termination.