President Trump’s nomination of Kevin Warsh to reform the Federal Reserve Board has garnered backing from his Senate allies, yet there’s a chance one senator might derail the confirmation.
Trump put forward Warsh’s name to head the Fed in January after expressing dissatisfaction with the Fed’s interest rate policies and getting into visible disputes with the current chairman, Jerome Powell, who recently oversaw extensive renovations to the Fed building. Warsh has taken initial steps in the confirmation process, showing up at the Capitol to testify before the Senate Banking Committee on Tuesday.
Post-hearing, seven Senate Republicans praised Warsh, including North Carolina’s Thom Tillis, who has not always sided with Trump. Despite Tillis’s positive remarks, he has set significant conditions for the administration that could hinder Warsh’s confirmation.
“Kevin Warsh is an outstanding pick for Fed Chairman. I look forward to backing his nomination, but that only comes after the Justice Department ceases its questionable investigation into Chairman Powell, which threatens the Fed’s autonomy,” Tillis remarked.
Notably, the Senate Banking Committee has a slim Republican majority of seven to six, meaning Tillis’s support is crucial for moving Warsh’s nomination forward.
“The DOJ continues its criminal probe into Chairman Powell based on committee testimony that wouldn’t reasonably suggest any criminal intent,” said Tillis. He remained firm, stating that he would oppose any Federal Reserve nominations, including Chairman, until the DOJ’s situation regarding Powell is completely resolved.
A potential way out has emerged, with committee chairman Tim Scott proposing the formation of a subcommittee to investigate the Fed’s costly construction projects. This would essentially take the place of the DOJ’s investigation into Powell but still offer room for the administration and its supporters to continue probing the Fed.
It’s uncertain if the DOJ will indeed drop its investigation, though Tillis expressed some optimism for a resolution.
“I believe this would not only provide a solution but also promote good governance,” he added.
