Why It Matters
The path has cleared for Kevin Warsh to become the next Federal Reserve chair after Senator Thom Tillis ended his opposition to the nomination. The North Carolina Republican cited the Department of Justice’s decision to close its criminal investigation into current Fed chair Jerome Powell as satisfying his primary concern about central bank independence.
With Tillis now supporting the nomination, Warsh is expected to advance through the Senate Banking Committee this week on a party-line vote. The timeline is compressed: Powell’s term expires May 15, leaving fewer than three weeks for confirmation and swearing-in of his successor.
What Happened
Tillis announced his position shift in a statement released Sunday, explaining that the DOJ’s termination of its probe into Powell removed what he called a serious threat to Federal Reserve independence. The senator had previously blocked progress on the Warsh nomination pending resolution of the investigation.
The DOJ confirmed last week it was ending the criminal inquiry, though the Fed’s internal watchdog will continue examining cost overruns on a multi-billion dollar headquarters renovation project. Tillis said he received assurances from the Justice Department regarding potential future appeals of court rulings in the matter, though any such appeals would focus on legal principles rather than continuation of the investigation itself.
Tillis appeared on NBC’s Meet the Press Sunday to discuss his decision, calling Warsh an outstanding nominee and urging the central bank to move past the distraction and return full attention to its core mission.
By The Numbers
Powell’s term as chair ends May 15, leaving 20 days for the confirmation process. His term as a Fed board governor runs through 2028, meaning he could remain at the central bank in a non-leadership role. The Senate Banking Committee will hold its vote on the Warsh nomination Wednesday. The Fed renovation project at the center of the watchdog investigation involves several billion dollars in expenditures.
What’s Next
The Banking Committee vote Wednesday is expected to send Warsh’s nomination to the full Senate floor, where Republicans hold a majority. Timing will be tight to complete floor debate and a final vote before Powell’s term expires mid-May.
A separate question remains unresolved: whether Powell will depart the Fed board entirely or remain as a governor through 2028. Powell said at a press conference last month he had no intention of leaving until the investigation reached transparency and finality. Tillis acknowledged Sunday that Powell may wait to see the outcome of any appeals process before making that decision, potentially extending the transition period.
Powell’s next press conference is scheduled for the coming week and could be his final appearance as chair, depending on the confirmation timeline and his own decision about staying on the board.