Republican Senator Thom Tillis will meet this week with Kevin Warsh, President Trump’s nominee to be the next chair of the Federal Reserve. Tillis has vowed to block Warsh’s confirmation until the administration’s criminal probe into current Chair Jerome Powell is resolved.
Tillis has characterized the Powell investigation as an assault on the central bank’s independence, though he says he supports Warsh, calling the former Fed governor “a qualified nominee with a deep understanding of monetary policy.”
Trump formally submitted Warsh’s nomination to the Senate last week.
Read more: How much control does the president have over the Fed and interest rates?
Tillis, who is not up for reelection, sits on the Senate Banking Committee, which is tasked with confirming the Fed nominee before it goes to the full Senate for a vote. All Democrats on the committee are opposed to Warsh’s nomination. With Tillis blocking the vote, confirmation of Warsh would fail. If the nomination went straight to the Senate floor, a similar situation would play out, given the slim majority Republicans hold in the Senate. A simple 51-49 majority is needed for confirmation.
Treasury Secretary Scott Bessent has suggested that the banking committee, rather than the Justice Department, investigate cost overruns at the Fed’s $2.5 billion renovation of the Fed’s headquarters in Washington, D.C.
Senate Banking Committee Chair Tim Scott, who questioned Powell during the hearing last summer about the Fed’s renovations, has said he doesn’t believe the Fed chair committed a crime. Tillis has also said he has a list of Republican senators on the banking committee who don’t think Powell committed a crime during his “two minutes of testimony” about the renovation project.
The Justice Department, under the direction of US Attorney Jeanine Pirro, launched the criminal investigation on Jan. 9 into whether Powell made false statements about the renovations during testimony before the Senate last summer.
Pirro attended an event at the White House on Jan. 8, where Trump criticized US attorneys for not moving quickly enough to prosecute certain of his political adversaries. The next day, the Justice Department served the subpoenas to the Fed.
Powell, who had remained quiet throughout a year of unrelenting attacks from Trump, responded in an unprecedented video statement in which he asserted the administration was pursuing the criminal inquiry because it disagreed with the level of interest rates set by the central bank. Trump wants lower rates.
Pirro has said she issued the subpoenas after the Fed didn’t respond to multiple information requests.