Warsh's Fed Chair Confirmation Gets Green Light as Senator Tillis Withdraws Opposition

Powell’s Term as Chair Expires on May 15
Warsh’s Confirmation Expected to Proceed Swiftly
Uncertainty Remains Over Powell’s Continued Board Membership

Kevin Walsh, Fed Chair Nominee_AP Yonhap News

The confirmation of Kevin Warsh as the nominee for Chair of the Federal Reserve (Fed) has received a green light. This comes after a Republican senator who had opposed his confirmation announced a reversal of his previous stance.

According to the Wall Street Journal (WSJ) on the 26th (local time), Senator Thom Tillis, a Republican from North Carolina and a member of the Senate Banking Committee, stated in a press release, "I look forward to supporting the confirmation of nominee Kevin Warsh." He added, "He is an excellent candidate, and now it is time for the Fed to put controversy behind it and fully focus on its core mission."

Senator Tillis decided to change his position because the Department of Justice's criminal investigation targeting Chair Jerome Powell has concluded. Until now, Senator Tillis had declared that he would oppose the confirmation of Warsh until the Justice Department investigation was withdrawn.

Senator Tillis explained that his support for Warsh's confirmation is based on two reasons: the end of the Justice Department's investigation into Chair Powell, and his belief that the appeal regarding a federal judge's March ruling—barring the issuance of a grand jury subpoena—was made on legal principles and would not be used as grounds to reissue a subpoena.

The U.S. Department of Justice had been investigating Chair Powell in connection with excessive spending on the renovation of the Federal Reserve headquarters. There had been criticism that the investigation was being used as leverage to pressure Powell, who had refused President Donald Trump's demands for an interest rate cut.

In an interview with NBC earlier that morning, Senator Tillis expressed concern that prosecutors were using the investigation as "leverage" to pressure Chair Powell to resign early. However, he said he decided to change his position after receiving assurances from prosecutors that they would not use the case as grounds to reopen the investigation.

With Senator Tillis's support, Warsh is now likely to be confirmed before Chair Powell's term expires on May 15. The Banking Committee is scheduled to vote on Warsh's confirmation next Wednesday.

However, it remains uncertain whether Chair Powell will also step down from his position as a Board member after his term as Chair ends on May 15. Powell's term as a Board member runs through January 2028. Generally, Fed Chairs have also left their Board positions after their terms as Chair expired.

Previously, Chair Powell had stated that he would not resign from the Board while the Justice Department investigation was ongoing, and after the investigation concluded, said that he "had not decided" whether to remain on the Board.

President Trump told reporters the previous day that there is an "obligation to identify the cause of the cost overrun," referencing the Inspector General's investigation into Chair Powell at the Fed. Citing continued uncertainty surrounding the investigation, the WSJ reported that even after Warsh's confirmation, Powell may remain as a Board member.

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