The announcement by Sen. Thom Tillis of North Carolina removes a big hurdle to Trump’s effort to install Kevin Warsh, a former high-ranking Fed official, in the job in place of Jerome Powell, long under White House pressure to lower interest rates. Tillis’ opposition was enough to stall the nomination in the GOP-controlled Senate Banking Committee as Powell neared the scheduled end of his term on 15 May.
“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 US attorney for the District of Columbia said her office’s investigation of the Fed’s multibillion-dollar building renovations was over. Powell’s brief congressional testimony last summer about that work was also under review.
The Fed’s internal watchdog is scrutinising a project, now at $2.5 billion (roughly €2.13bn)after earlier estimates had put it at $1.9 billion (around €1.62bn), that the Republican president has criticised for cost overruns. Powell had asked in July for the inspector general’s review.
“I believe that there will not be any wrongdoing. Maybe we find a little stupid 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 DC that thought this was going to be a lever to have Mr. Powell leave early,” he said.
Tillis, who infuriated Trump in June for opposing his big tax and spending cuts bill over Medicaid reductions and then 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 respect inspector generals.”
Important week for Fed leadership
The committee on Saturday said it planned to vote Wednesday on Warsh’s nomination. The ranking Democrat, Massachusetts Sen. Elizabeth Warren, responded with a statement that “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.”
Also Wednesday, Fed policymakers will meet and are expected to keep their key interest rate unchanged for the third straight meeting, shrugging off Trump’s demands for a cut. At a news conference, Powell could indicate whether he will remain on the Fed’s board of governors after his term as chair ends, an unusual but not completely unprecedented step that would deny Trump the opportunity to fill another seat on the seven-member board. Powell’s term as a governor lasts until January 2028.
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.
Without the constraints of a political campaign, Tillis has spoken out forcefully about Powell, decrying the inquiry by US Attorney Jeanine Pirro, a longtime Trump ally, as a “vindictive prosecution” and suggested it threatened the Fed’s longtime independence from day-to-day politics. Tillis told NBC that he had gotten assurances from the Justice Department that he needed “to feel like they were not using DOJ as a weapon to threaten the independence of the Fed. So this will allow Mr. Warsh to move on with his confirmation.”
On Saturday, Trump was asked by reporters whether there was now smooth sailing for Warsh with the end of the Justice Department’s investigation. “I imagine it’s smooth,” Trump said, adding that his nominee “is going to be fantastic.” The president said he still wanted to find out “how can a building of that size cost … whatever it’s going to be.”
Trump visited the Fed building in July and, in front of television cameras, said the renovations would run $3.1 billion (€2.64bn). Powell, standing next to him, said after looking at a paper presented to him by Trump, that the president’s latest price tag was incorrect.
Justice Department pursues Trump adversaries
The investigation was among several undertaken by the Justice Department into Trump’s percieved adversaries. For months it had failed to gain traction as prosecutors struggled to articulate a basis to suspect criminal conduct. Other efforts by the department to prosecute Trump’s adversaries, including New York state Attorney General Letitia James, a Democrat, and former FBI Director James Comey, have also been unsuccessful.
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 X that she “will not hesitate to restart a criminal investigation should the facts warrant doing so.” The acting attorney general, Todd Blanche, told NBC on Sunday that ”there is no doubt that we will investigate” if the inspector general finds evidence of criminal conduct.
Warsh is a financier and former member of the Fed’s board of governors. Trump nominated him in January.