Senator Thom Tillis announced on April 27 that he would no longer block Kevin Warsh's Federal Reserve nomination after the Department of Justice dropped its criminal investigation into current Fed Chair Jerome Powell over alleged cost overruns on the Fed's headquarters renovation. According to reports from AP, Tillis had blocked Warsh since January, arguing that the DOJ investigation was a 'bogus and vindictive prosecution' that threatened the Fed's independence. The block was sufficient to deadlock the 13-to-11 Republican-majority Banking Committee, as even one Republican defection would have stalled Warsh's path forward. Tillis told NBC's Meet the Press that he received assurances from the Justice Department that 'the case is completely and fully settled' and that the only way an investigation would be opened would be a criminal referral from an inspector general. As reported by Africanews, Tillis added that he had gotten assurances from the Justice Department that he needed 'to feel like they were not using DOJ as a weapon to threaten the independence of the Fed'. 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' two days after the US attorney for the District of Columbia said her office's investigation was over. Speaking on NBC News, Tillis said '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.'
The Senate Banking Committee confirmed it will vote on Warsh's nomination on Wednesday, with a full Senate floor vote expected to follow before Powell's term expires on May 15. As reported by AP, the committee announced Saturday that it planned to vote Wednesday on Warsh's nomination. The timeline is compressed as the Senate historically has rarely confirmed a Fed chair nominee in less than three weeks. US Attorney for DC Jeanine Pirro announced on Friday that her office was closing the investigation and handing oversight of the Fed renovation project to the Fed's inspector general, who had already been conducting a review since last July. Powell had asked in July for the inspector general's review, with the project now estimated at $2.5 billion after earlier estimates had put it at $1.9 billion. According to Africanews, the committee on Saturday said it planned to vote Wednesday on Warsh's nomination, with the ranking Democrat, Massachusetts Sen. Elizabeth Warren, responding with a statement that 'no Republican claiming to care about Fed independence should support moving forward the nomination of Kevin Warsh, who proved in his nomination hearing to be nothing more than President Trump's sock puppet.'
Warsh is positioned to become the most crypto-literate Fed chair in the institution's history with extensive financial disclosures revealing indirect stakes across DeFi lending, decentralized derivatives, Layer 1 and Layer 2 networks, prediction markets, and Bitcoin payments infrastructure through venture fund structures. According to crypto.news, he has publicly described Bitcoin as having a positive disciplinary effect on economic policy and told senators at his April 21 hearing that 'digital assets are already part of the fabric of our financial services industry'. Bitcoin climbed approximately 10% to trade near $78,000 in recent weeks as Warsh confirmation odds improved, with analysts describing him as the most constructive possible outcome for crypto from a Fed chair appointment. Warsh reported exposure to more than 30 crypto-related investments, including holdings tied to Solana and activity linked to decentralized exchanges such as dYdX, as reported by crypto.news. The portfolio has led some market participants to view him as more familiar with the industry than previous candidates, even as his policy stance remains under close scrutiny.
Senator Elizabeth Warren called Warsh a 'sock puppet' and said no Republican claiming to care about Fed independence should support moving the nomination forward. As reported by AP, Warren responded with a statement that 'no Republican claiming to care about Fed independence should support moving forward the nomination of Kevin Warsh, who proved in his nomination hearing to be nothing more than President Trump's sock puppet.' At a hearing last week, Warsh told senators he never promised the White House that he would cut interest rates and pledged to be 'an independent actor' if confirmed as chair. Hours before that, Trump had been asked in a CNBC interview whether he would be disappointed if Warsh did not immediately cut rates, with the president responding 'I would.' The FOMC is also scheduled to meet on Wednesday, with markets expecting rates to remain unchanged for the third consecutive meeting, as Fed policymakers are expected to keep their key interest rate unchanged. If Warsh is not confirmed before May 15, Powell has indicated he plans to remain in place as a voting member of the Fed's board until January 2028, providing continuity even if the confirmation timeline slips.
