GOP Opposition to Powell Probe Puts Warsh’s Path to Fed Chairman in Jeopardy

President Trump’s bid to install American economist Kevin Warsh as chairman of the Federal Reserve hit its first obstacle Friday as Republican Senator Thom Tillis vowed to oppose the nomination until the Justice Department concludes its probe of current Fed chief Jerome Powell.“Kevin Warsh is a qualified nominee with a deep understanding of monetary policy,” the retiring North Carolina senator stated on Friday morning. “However, the Department of Justice continues to pursue a criminal investigation into Chairman Jerome Powell based on committee testimony that no reasonable person could construe as possessing criminal intent. Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.”Mr. Tillis reiterated the stance he outlined earlier this month, pledging to “oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved.”As a member of the Senate Banking, Housing, and Urban Affairs Committee, which has 13 Republicans and 11 Democrats, Mr. Tillis’s vote could prove decisive in determining whether Mr. Warsh advances to a full Senate vote. Senate Majority Leader John Thune, when asked Thursday if the Senate could confirm a Fed nominee without Mr. Tillis’s backing, said: “Uh, probably not.”Mr. Warsh, 55, previously served on the Federal Reserve Board of Governors from 2006 to 2011. During his time as a Fed governor, Mr. Warsh was regarded as an inflation hawk who favored tighter monetary policy. More recently, though, Mr. Warsh has expressed support for Mr. Trump’s push to lower rates. Mr. Trump announced Mr. Warsh’s nomination in a Truth Social post on Friday, stating, “I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best. On top of everything else, he is ‘central casting,’ and he will never let you down.” The Department of Justice opened a criminal investigation into Mr. Powell this month in connection with his June 2024 congressional testimony regarding cost overruns on the $2.5 billion renovation of the Fed’s headquarters.Mr. Powell has criticized the probe as a politically motivated attempt by the Trump administration to pressure the Fed into cutting interest rates. Since the start of his second term in office, Mr. Trump has sharply criticized Mr. Powell and the Fed’s cautious approach to lowering rates.Treasury Secretary Scott Bessent on Wednesday defended the administration’s investigation, rejecting claims that it would weaken the Federal Reserve’s independence. “I think that the message is that independence does not mean no accountability,” Mr. Bessent said on CBS. “I’ve been calling for the Fed to do an internal investigation on numerous things since last spring, and they’ve chosen not to do it.”

GOP Opposition to Powell Probe Puts Warsh’s Path to Fed Chairman in Jeopardy

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