By Jordan Meadows
Staff Writer
Sen. Thom Tillis is escalating his standoff over the future of the Federal Reserve, doubling down Tuesday on his demand that the Department of Justice drop its investigation into Fed Chair Jerome Powell before he will support President Donald Trump’s nominee, Kevin Warsh.
The dispute, playing out in a high-stakes Senate Banking Committee hearing, has effectively stalled Warsh’s path to confirmation and injected new uncertainty into leadership of the central bank just weeks before Powell’s term as chair is set to expire on May 15.
Tillis, a key Republican vote on the narrowly divided committee, made clear he is prepared to block any nominee until the probe is resolved.
“You have extraordinary credentials. They’re impeccable,” Tillis told Warsh during Tuesday’s hearing. “The problem I have is where we are right now.”
With Republicans holding only a one-seat advantage on the Senate Banking Committee and all Democrats expected to oppose Warsh, Tillis’s position has given him outsized influence. His refusal to back the nominee is, for now, enough to keep the nomination from advancing to the full Senate.
Tillis emphasized that his opposition remains firm: “Let’s get rid of this investigation so I can support your confirmation.”
The impasse stems from a Justice Department investigation into Powell tied to cost overruns on renovations at the Federal Reserve’s Washington headquarters and his testimony to Congress about the project. Tillis dismissed the underlying issue as routine for government projects.
“If we put everybody in prison in the federal government that has had a budget go over, we’d have to reserve an area roughly the size of Texas for a penal colony because of the way government projects work,” he said.
He also sharply criticized the origins of the probe, appearing to target U.S. Attorney Jeanine Pirro. A federal judge has already blocked two subpoenas in the case, though Pirro has vowed to appeal, a process that could take months.
Powell, whose term as Fed chair expires in May but who remains a board member through 2028, has said he will stay at the central bank while the investigation continues. Without resolution, it remains unclear who would lead the Fed if Warsh is not confirmed in time. Powell has indicated he could remain in an interim capacity, even as Trump has publicly clashed with him over interest rate policy.
The president has repeatedly criticized Powell for not cutting rates aggressively enough, while Powell has defended the Fed’s independence and data-driven approach.
During Tuesday’s hearing, Warsh sought to reassure lawmakers that he would maintain the Fed’s independence.
“Monetary policy independence is essential,” Warsh said. “I am committed to ensuring that the conduct of monetary policy remains strictly independent.”
Warsh, a former Fed governor and Hoover Institution fellow, fielded questions on monetary policy, his financial background, and his ties to the Trump administration. If confirmed, he would become the wealthiest Fed chair in history.
Tillis echoed that concern in a February statement, warning that “protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable.” At the same time, Trump has shown little interest in backing off the probe, saying he does not plan to pressure the Justice Department to end it.
The result is a political and institutional stalemate: a nominee with strong Republican support but blocked by a single senator, an embattled Fed chair unwilling to step aside, and a Justice Department investigation that shows no sign of ending soon.
