Republican Senator Thom Tillis has announced his readiness to proceed with the confirmation of Kevin Warsh as the next chair of the Federal Reserve. This shift follows the Department of Justice's decision to drop its criminal investigation into current Chair Jerome Powell.
Tillis had previously withheld his support, citing concerns that the DOJ probe into Powell’s management of building renovations was an attempt to undermine the central bank's political independence. With the investigation now referred to the Fed's inspector general, the path for Warsh appears clear.
The confirmation process has been marked by significant tension between the executive branch and the Federal Reserve. Powell had publicly characterized the DOJ's actions as a form of intimidation intended to pressure the institution into lowering interest rates.
A federal judge had previously intervened in the matter, blocking subpoenas that were deemed to have been issued for improper purposes. The sudden closure of the case by U.S. Attorney Jeanine Pirro removes the primary obstacle that had stalled the nomination process in the Senate Banking Committee.
Kevin Warsh, who served as a Fed governor between 2006 and 2011, has received praise from Tillis for his professional credentials. During his confirmation hearings, Warsh outlined a vision for the Fed that includes closer cooperation with the Treasury on non-monetary policy matters.
Warsh also addressed concerns regarding the current economic climate, suggesting that existing inflation metrics might be overestimating price pressures. He maintained that he has not made any specific commitments to the administration regarding interest rate adjustments.
The timeline for the transition remains extremely tight as Jerome Powell’s term is set to expire on May 15. The Senate must now move quickly to finalize the confirmation before the upcoming recess period begins.
If the Senate fails to meet the mid-May deadline, Powell has indicated a willingness to serve as a temporary chair. However, the current momentum suggests that Republican leadership is confident in securing the necessary votes to install Warsh as the new leader of the nation's central bank.