Tillis drops block on Warsh as DOJ probe of Powell ends

The Justice Department’s decision ends Tillis’s opposition to Warsh

Sen. Thom Tillis of North Carolina said Sunday he was prepared to move ahead with confirming Kevin Warsh as the next chair of the Federal Reserve, removing a key obstacle to President Donald Trump’s pick after the Justice Department ended an investigation involving current Fed chair Jerome Powell.

Tillis said his shift came after the U.S. attorney in Washington ended the probe of the Fed’s multibillion-dollar building renovations, an inquiry that had been under review and had contributed to Republican resistance in the Senate panel that oversees Fed nominations.

“I am prepared to move on with the confirmation of Mr. Warsh. I think he’s going to be a great Fed chair,” Tillis told NBC’s “Meet the Press,” according to the Associated Press.

Why Tillis’s change matters for the Senate timetable

Tillis’s earlier opposition had helped stall Warsh’s nomination in the GOP-controlled Senate Banking Committee, as Powell approached the scheduled end of his term as chair on May 15. The committee said Saturday it planned to vote Wednesday on Warsh’s nomination.

The confirmation vote comes as the Fed’s leadership transition remains in focus for lawmakers and the White House, with Powell long under White House pressure to lower interest rates.

Tillis tied his support to assurances about DOJ independence

Tillis told NBC that the Justice Department’s update gave him assurances that the case was settled and that an investigation would be reopened only under narrower circumstances, including a criminal referral tied to the inspector general process.

In the same remarks, Tillis said he received assurances from the Justice Department that it was important to ensure that federal prosecutors would not use the department’s authority to threaten the Federal Reserve’s independence as political pressure continued over monetary policy.

Powell had faced scrutiny tied to Fed renovation costs

The AP report said the Fed’s internal watchdog was scrutinizing a renovation project that had risen to $2.5 billion after earlier estimates put it at $1.9 billion. The report said Powell had asked in July for the inspector general’s review.

Powell, in earlier congressional testimony, said he believed there would not be wrongdoing and suggested that even if someone made a poor decision about the project, it did not rise to the level of criminal prosecution. The AP report also said Powell’s testimony was under review in connection with the Justice Department’s investigation.

Democrats criticized Warsh even as the vote approached

In response to the planned committee vote, Sen. Elizabeth Warren said no Republican claiming to care about Fed independence should support moving forward with Warsh’s nomination. In her statement reported by the AP, she criticized Warsh as having shown in his hearing that he was not positioned to act independently.

Separately, the AP report said Trump had been asked whether there was now smooth sailing for Warsh with the end of the Justice Department investigation; Trump said “I imagine it’s smooth” and called his nominee “going to be fantastic.”

Fed meeting timing: policymakers expected to hold rates steady

While senators prepare for the confirmation vote, the AP report said Fed policymakers are expected to keep the key interest rate unchanged for a third straight meeting, despite Trump’s demands for a cut.

The report said Powell could also indicate whether he would remain on the Fed’s board of governors after his chair term ends—an unusual step that would keep another seat from being filled by Trump. Powell’s term as a governor, the report added, lasts until January 2028.

Investigation fallout and broader DOJ efforts

The AP report said the Justice Department investigation of the Fed renovation matter was among several undertaken into Trump’s perceived adversaries that had struggled to produce evidence sufficient for criminal prosecution.

It also said that a federal judge quashed Justice Department subpoenas issued to the Fed in the investigation, describing the subpoenas’ purpose as harassment and pressure aimed at causing Powell to resign and pave the way for a new chair. The AP report said a prosecutor handling the Powell case acknowledged at a closed-door court hearing that the government had not found evidence of a crime.

The report also described public statements by DOJ officials and other figures, including comments on potential future action if the inspector general found evidence of criminal conduct.