Tillis will support Warsh, clearing way for Trump's Fed pick
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Sen. Thom Tillis (R-N.C.) questions Kevin Warsh, nominee to Federal Reserve chair, last week. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images
Sen. Thom Tillis (R-N.C.) on Sunday said that he would no longer block Kevin Warsh's Federal Reserve chair confirmation, removing a key hurdle for President Trump's pick to lead the central bank.
Why it matters: The Department of Justice said last week that it was dropping its investigation into current Fed chair Jerome Powell, satisfying the key Republican's conditions for supporting Warsh.
What they're saying: "I have been clear from the start: the U.S. Attorney's Office criminal investigation into Chair Powell was a serious threat to the Fed's independence, and it needed to end before I could support Kevin Warsh's confirmation," Tillis said in a Sunday statement.
- Though the probe into Powell has ended, the Department of Justice is allowing the Fed's watchdog to investigate cost "overruns" related to its multi-billion dollar building renovation project.
- Tillis said Sunday on NBC's "Meet The Press" that he had been "assured" by the DOJ that they might appeal a judge's ruling to quash Fed subpoenas, though that would be a challenge on legal principles, not to continue the investigation.
- "With these assurances, I look forward to supporting Kevin Warsh's confirmation. He is an outstanding nominee, and it is time for the Federal Reserve to move beyond this distraction and return its full attention to its mission," Tillis said in his statement.
What to watch: With Tillis' support, the Warsh nomination is expected to advance on party lines out of the Senate banking committee to a full Senate vote.
- Timing is tight: Fed chair Jerome Powell's term expires May 15, leaving less than three weeks for Warsh to be confirmed and sworn in as the leader of one of the world's most important economic bodies.
- The Senate committee will vote to advance Warsh's nomination on Wednesday.
The intrigue: The DOJ probe's conclusion may or may not satisfy the bar Powell set for departing the Fed board — a question that hangs over next week's press conference, which looks likely to be his last as chair.
- Powell could choose to stay on the Fed board through 2028, when his term as a governor expires.
- He laid out this test at a press conference last month: "I have no intention of leaving the Board until the investigation is well and truly over, with transparency and finality."
"Mr. Powell will have to make his own decisions at some point in the future about when and if he leaves the board," Tillis said on "Meet The Press."
- "I suspect Mr. Powell wants to see what happens with the appeal and to make sure that it is fully settled after the appeal. It could be a lengthy process. Hopefully not," Tillis said.
