Fed pick: Tillis doubles down on Warsh blockade over concerns about Fed independence

• Tillis stated he is willing to maintain the blockade for the remainder of this Congress (333 days) until the DOJ investigation concludes or Powell's process is resolved
• The DOJ opened an investigation into Powell last month regarding alleged cost overruns for Federal Reserve headquarters renovations, with a separate probe into Fed Governor Lisa Cook for alleged mortgage fraud
• The retiring senator said he would support Warsh's nomination once the matter is settled, criticizing the administration for not consulting properly before issuing subpoenas

Summary

Key Development: Sen. Thom Tillis (R-N.C.) reaffirmed his commitment to block Kevin Warsh's nomination as Federal Reserve Chair until the Department of Justice completes its investigation into current Fed Chair Jerome Powell.

Political Dynamics: Tillis holds sufficient power on the Senate Banking Committee to deadlock any Fed nominee, preventing advancement to the Senate floor. The senator, who is retiring in January, stated he's "willing to let it play out for the remainder of this Congress" — approximately 333 days — if necessary to maintain Fed independence.

DOJ Investigations: The Justice Department launched an investigation into Powell last month regarding alleged cost overruns related to Federal Reserve headquarters renovations. Separately, the DOJ is investigating Fed Governor Lisa Cook over alleged mortgage fraud.

Tillis's Position: The North Carolina Republican indicated he would only support Warsh's nomination after the Powell investigation concludes. He rejected the possibility of lifting his blockade even if the DOJ agreed to drop the investigation in exchange for Powell's departure after his term as chair ends (Powell could remain as a governor for two additional years).

Market Implications: This political standoff creates significant uncertainty around Fed leadership during a critical period for monetary policy. The prolonged blockade could leave the central bank's top position in limbo, potentially affecting policy continuity and market confidence. Tillis criticized the administration for moving forward without proper consultation, stating "They got ahead of their blockers."

The impasse underscores growing political tensions around Fed independence and leadership transitions.