Republican Sen. Thom Tillis said Sunday that he will no longer block the nomination of Kevin Warsh to be the next leader of the Federal Reserve, now that the Justice Department has dropped its criminal investigation of current Fed Chair Jerome Powell. Tillis’s decision removes what is likely the last hurdle for Warsh’s nomination to advance when the Senate Banking Committee votes on Wednesday.
“I have been clear from the start: the U.S. Attorney's Office criminal investigation into Chair Powell was a serious threat to the Fed's independence, and it needed to end before I could support Kevin Warsh's confirmation,” Tillis said in a statement.
Last November, the DOJ opened an investigation into Powell’s management of a renovation project at the Fed’s headquarters in Washington, which has gone over budget, but the move was widely seen as an effort by the Trump administration to pressure Powell into cutting interest rates, as President Trump has repeatedly demanded. Tillis was critical of the investigation and said he would block any nominee from being confirmed until it was over, even if it meant that a new leader would be unavailable when Powell’s term as chair expires on May 15.
Powell had indicated that he would remain as chair if no replacement was available, creating something of a dilemma for Trump, who wanted to see both his own handpicked replacement take over and his nemesis, the current leader, punished in some way. (Powell was originally put in place by Trump during his first administration, but the president appeared to regret that choice once the two parted ways on interest rate policy.)
Tillis said he had been reassured that the federal investigation would be reopened only if there was a criminal referral from the inspector general now looking into the cost overruns.
“With these assurances, I look forward to supporting Kevin Warsh’s confirmation,” Tillis said. “He is an outstanding nominee, and it is time for the Federal Reserve to move beyond this distraction and return its full attention to its mission.”