Senator Thom Tillis of North Carolina has removed a big hurdle to President Trump’s effort to install Kevin Warsh, a former Fed governor, as Federal Reserve chair in place of Jerome Powell, who has been under White House pressure to lower interest rates.
Tillis’s opposition had been enough to stall the nomination in the GOP-controlled Senate Banking Committee as Powell neared the scheduled end of his term on May 15.
“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,” two days after the U.S. attorney for the District of Columbia said her office’s investigation of the Fed’s multibillion-dollar building renovations was over.
The Fed’s internal watchdog is scrutinizing a project now at $2.5 billion after earlier estimates had put it at $1.9 billion, which the Republican president has criticized for cost overruns. Powell had asked in July for the inspector general’s review.
“I believe that there will not be any wrongdoing. May we find a little stupidity 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,” he said.
Tillis, who announced he would not seek reelection in 2026, added that he had received assurances from the Justice Department 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 respected inspector generals.”
The committee said it planned to vote Wednesday on Warsh’s nomination. The ranking Democrat, Massachusetts Sen. Elizabeth Warren, responded: “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 a hearing last week, Warsh told senators he never promised the White House that he would cut interest rates and pledged to be “an independent actor” if confirmed as chair. Hours before that, Trump had been asked in a CNBC interview whether he would be disappointed if Warsh did not immediately cut rates. “I would,” the president said.
Tillis has spoken out forcefully about Powell, decrying the inquiry by U.S. Attorney Jeanine Pirro as a “vindictive prosecution” and suggesting it threatened the Fed’s longtime independence from day-to-day politics.
On Saturday, Trump was asked by reporters whether there was now smooth sailing for Warsh with the end of the DOJ’s investigation. “I imagine it’s smooth,” Trump said, adding that his nominee “is going to be fantastic.”
The investigation was among several undertaken by the Justice Department into Trump’s perceived adversaries. For months it had failed to gain traction as prosecutors struggled to articulate a basis to suspect criminal conduct.
Last month, a federal judge quashed Justice Department subpoenas issued to the Fed in the investigation, describing their purpose as “to harass and pressure Powell to resign” and open the path for a new chair. A prosecutor handling the Powell case had acknowledged at a closed-door court hearing that the government had not found any evidence of a crime.
Pirro said Friday on social media that she “will not hesitate to restart a criminal investigation should the facts warrant doing so.”
Trump appointed Powell as chair in 2017 during his first administration and has for years attempted to pressure the central bank to cut short-term interest rates.
Even after a new Fed chair is in place, Powell could elect to stay on the board to finish his term as a Fed governor, which lasts until January 2028. He has told reporters he had not yet decided whether to do so.
Warsh is a financier and former member of the Fed’s board of governors. Trump nominated him in January.