Treasury Chief Bessent Pushes for Warsh Hearings Despite Powell Investigation Stalemate
A Republican senator's commitment to blocking the Federal Reserve chair confirmation until a Department of Justice probe into Jerome Powell concludes presents a significant obstacle.
Treasury Secretary Scott Bessent of the United States is urging the Senate Banking Committee to move forward with confirmation hearings for Kevin Warsh, the nominee for Federal Reserve chair, even as a confrontation continues over an active investigation into current Fed chair Jerome Powell.
During an appearance on Fox News' Sunday Morning Futures, Bessent addressed recent opposition from Republican Senator Thom Tillis, who has indicated his intention to delay processing the incoming Fed chair until the Department of Justice (DOJ) investigation into Powell reaches a conclusion.
"Senator Tillis has come out and said he thinks that Kevin Warsh is a very strong candidate," Bessent said, adding:
"So I would say, why don't we get the hearings underway and see where Jeanine Pirro's investigation goes?"
In spite of his endorsement of Warsh, Tillis, who serves on the Senate Banking Committee, has pledged on several occasions to obstruct the nomination until the DOJ gets "to the truth" of the matter, as part of an effort to safeguard Fed independence.
"I'd be one of the first people to introduce Mr. Warsh if we're behind this and support him, but not before this matter is settled," Tillis told CNBC on Wednesday.
The Republican Party holds 13 of the 24 seats in the Senate Banking Committee, which means they have the capability to vote as a unified bloc to advance Warsh. Nevertheless, with Tillis seeking to stop the process, he has the ability to use his vote in opposition to Warsh, thereby placing the final decision in the hands of the Democrats.
The DOJ, under the leadership of attorney Jeanine Pirro, first launched an investigation into Powell in early January, delivering grand jury subpoenas to the Fed along with threats of criminal charges connected to expenses associated with a multi-year renovation project at Fed office buildings.
Powell quickly rejected the allegations and maintained on Jan. 11 that the investigation was politically motivated as the Fed's interest rate policy was against the wishes of US President Donald Trump.
On Jan. 30, Trump officially nominated Kevin Warsh as the next Fed chair to succeed Powell.
After a presidential nomination is made, the nominee is required to appear before the Senate Banking Committee for a review hearing. The committee subsequently votes on whether to forward the nominee to the full senate with a favorable or non-favorable recommendation, or no recommendation at all.
Ultimately, the full Senate then conducts a debate and vote, and if the nominee receives confirmation, they can be officially sworn in as the next Fed chair.