April 26 (Reuters) – Republican Senator Thom Tillis on Sunday said he would allow Senate confirmation of Federal Reserve chair nominee Kevin Warsh to go forward after the Department of Justice on Friday dropped an investigation into Fed Chair Jerome Powell that Tillis viewed as a threat to the central bank’s political independence.
Tillis had vowed to block any Fed nominee from confirmation as long as the probe remained open.
“I am prepared to move on with the confirmation of Mr. Warsh,” Tillis, who represents North Carolina, said on NBC’s “Meet the Press.” “I think he’s going to be a great Fed chair.”
The decision ends months of limbo for Warsh and clears a path for his Senate confirmation by May 15, when Powell’s leadership term ends.
Powell disclosed in January that the DOJ had opened a criminal investigation into his management of a $2.5 billion renovation of two Fed buildings in Washington. In a blunt video released on a Sunday evening, Powell called it intimidation and part of the Trump administration’s attempts to pressure the Fed into cutting interest rates.
A federal judge in March blocked the DOJ’s subpoenas, finding they were issued for the improper purpose of getting Powell to lower rates or resign. U.S. Attorney Jeanine Pirro said she would appeal and just last week signaled publicly she would press on with the investigation.
On Friday, however, she said on X that she was ending it and would ask the Fed’s own inspector general, already months into its own review of the renovations, to take over.
Tillis said he received assurances from the Justice Department that the case was “completely and fully settled” and that the appeal would not be used to reopen the investigation.
He added in a post on X following the interview that the inspector general probe was “appropriate.”
“I have confidence it will be conducted thoroughly and professionally,” he said.
Tillis’ objections had never been about Warsh himself, whom he described at his confirmation hearing on Tuesday as having “impeccable” credentials.
CONFIRMATION EXPECTED WITH TILLIS SUPPORT
Warsh, a Fed governor from 2006 to 2011, has promised to overhaul the Fed’s approach to monetary policy and to cooperate more closely on non-monetary policy matters with the Treasury and other parts of government.
He told lawmakers at his hearing that Trump did not try to get him to promise to lower interest rates, though he also said he was not worried that tariffs were contributing to inflation, and suggested that Fed policymakers may be using measures of inflation that overestimate price pressures.
With Tillis’ support, the Senate Banking Committee’s Republicans now have the majority they need to outvote unified Democratic opposition and advance Warsh’s nomination to the full Senate, where Republicans are expected to confirm him.
With about three weeks to go before Powell’s chair term ends, during one of which the Senate is scheduled to be on recess, the timeline is tight. The Senate has only once before confirmed a Fed nominee in less than three weeks.
Powell has said he would serve as temporary chair should Warsh not be confirmed before May 15.
Once Warsh is installed as Fed chair, Powell may still stay on as a governor under a term that runs for another year and a half.
“I have no intention of leaving the Board until the investigation is well and truly over, with transparency and finality,” Powell said last month.
Pirro said on Friday that she may resume her investigation depending on the inspector general’s findings. Senate Democrats Elizabeth Warren of Massachusetts and Dick Durbin of Illinois on Friday called that statement a threat of “future baseless investigations” into Powell or any other Fed governor.
(Reporting by Nichola Groom in San Marino, California and Ryan Patrick Jones in Toronto; Editing by Katharine Jackson and Bill Berkrot)
Comments