Senator Thom Tillis, R-N.C., announced Sunday that he will vote to confirm Kevin Warsh, President Donald Trump's nominee to lead the Federal Reserve, ending a weeks-long blockade over his opposition to a Justice Department investigation into current Fed Chair Jerome Powell.
Tillis said weekend negotiations produced what he called necessary assurances from DOJ officials. "We worked a lot over the weekend to make sure that we were very clear that we have assurances from the DOJ that I needed to feel like they were not using the DOJ as a weapon to threaten the independence of the Fed," Tillis told NBC News' 'Meet the Press.' The agreement will allow Warsh's confirmation to proceed before Powell's term expires May 15.
On Friday, the Justice Department announced it was dropping its investigation into Powell. The probe had centered on cost overruns for an ongoing renovation project at the Federal Reserve's Washington headquarters. U.S. Attorney for D.C. Jeanine Pirro said in a statement that DOJ was clearing the way for Federal Reserve Inspector General Michael E. Horowitz to "scrutinize the building costs overruns."
Tillis had been highly critical of the investigation while blocking Warsh's nomination, calling Warsh himself "a perfect candidate" and making clear his objection was not to the nominee but to what he viewed as executive branch pressure on central bank independence.
What the Right Is Saying
Republican supporters of the investigation point to documented cost overruns on the Federal Reserve's headquarters renovation project, which grew from an initial estimate to a final figure exceeding $400 million. They argue that federal agencies must be accountable for spending decisions regardless of their policy function.
President Trump told reporters Saturday that the investigation was "not dropped," adding that project cost overruns represent a "big thing." The White House has maintained that oversight of federal spending falls within congressional and executive branch authority, separate from monetary policy considerations.
Acting Attorney General Todd Blanche, appearing on 'Meet the Press' alongside Tillis, said DOJ officials would allow Inspector General Horowitz to complete his review. "He has a lot of tools. He can look at records," Blanche said, adding that the department had "lot of faith" in the inspector general's process. However, Blanche did not rule out future charges if Horowitz uncovers wrongdoing.
Conservative commentators have argued that questioning federal spending is fundamentally different from interfering with interest rate decisions. Senator Tim Scott of South Carolina said oversight and independence are "not mutually exclusive" principles in constitutional governance.
What the Left Is Saying
Democratic lawmakers and financial regulators have argued that the Justice Department probe represented unprecedented political interference with Federal Reserve operations. In March, a federal judge blocked subpoenas issued by Pirro's office, saying they were backed up by "essentially zero evidence."
Powell himself called the investigation "intimidation" tied to the administration's push for lower interest rates. In legal filings, Powell's counsel argued that he could not resign while a criminal investigation was pending without compromising the Fed's institutional independence.
Senate Democrats have largely defended Powell throughout the ordeal. Senator John Hickenlooper of Colorado said the DOJ investigation "crossed a line" by using law enforcement tools to pressure monetary policy decisions. The Federal Reserve Board declined comment when asked about DOJ dropping the probe Friday.
Fed watchers note that while Powell's chairmanship ends May 15, he could remain on the board as a governor. Historically, Fed chairs have resigned both positions simultaneously, but legal analysts say Powell may stay in the lower-ranking role to protect the institution from further pressure.
What the Numbers Show
The Federal Reserve headquarters renovation project has seen costs balloon to an estimated $400 million or more, up from initial projections. The Fed has attributed increases partly to unforeseen circumstances including a sinkhole discovered during construction and rising prices for raw building materials.
Inspector General Horowitz previously reviewed these costs in 2021, finding no wrongdoing. Powell himself requested a second review last July before the Justice Department investigation began.
Warsh served as a Federal Reserve governor from 2006 to 2011, giving him direct experience with central bank operations. He has widespread Republican support in the Senate, where his confirmation would require a simple majority vote.
Powell's term as chair expires May 15. The Fed's next two-day policy meeting on interest rates begins Tuesday, coinciding with the Senate Banking Committee's expected advancement of Warsh's nomination to the full Senate floor. Economists do not expect the Fed to change interest rates at this meeting amid uncertainty from global energy price spikes related to ongoing conflict in the Middle East.
The Bottom Line
Tillis' announcement effectively clears the path for Warsh's confirmation before Powell's chairmanship concludes. The resolution came only after DOJ dropped its investigation and provided what Tillis described as credible assurances that federal law enforcement would not be used to influence monetary policy decisions.
The case has revived debate over Federal Reserve independence, a principle central bankers argue is essential to maintaining public trust in the dollar and controlling inflation. Whether Powell remains at the Fed in any capacity and whether Congress codifies limits on executive branch investigations of the central bank remain open questions.
Senate Majority Leader John Thune has scheduled floor time for Warsh's confirmation vote later this week, with final passage expected before May 15.