US Treasury Secretary Scott Bessent has called on the Senate Banking Committee to proceed with confirmation hearings for Federal Reserve chair nominee Kevin Warsh, despite an ongoing standoff. The delay stems from a Department of Justice (DOJ) investigation into current Fed Chair Jerome Powell, which Republican Senator Thom Tillis insists must be resolved before he will support moving forward with Warsh's nomination. Bessent suggested moving ahead with hearings while the probe continues, noting Tillis has called Warsh a "very strong candidate."
Senator Tillis, a member of the committee, has vowed to block the nomination until the DOJ investigation reaches a conclusion, stating he wants to protect the Fed's independence. With Republicans holding 13 of the 24 committee seats, they could push the nomination through as a bloc, but Tillis's opposition could hand the decisive vote to Democrats.
The DOJ investigation, led by attorney Jeanine Pirro, began in early January and involves grand jury subpoenas and potential criminal charges related to expenses for Fed office building renovations. Powell has denied the allegations and argued the probe is politically motivated, linked to his interest rate policy being at odds with former President Donald Trump's wishes.
In a separate development, former President Donald Trump hinted that nominee Kevin Warsh could be open to interest rate cuts. When asked if Warsh had committed to cutting rates, Trump responded, "No, but we talk about it. I've been following him." This remark has fueled market speculation that Warsh, a former Fed Governor, could bring a more dovish stance to the central bank if confirmed, marking a potential shift from the current policy bias.
The nomination process requires a review hearing before the Senate Banking Committee, a committee vote, and finally a debate and vote by the full Senate.
