Trump's Fed pick Kevin Warsh faces unexpected roadblock over ongoing Powell probe

• Sen. Thom Tillis placed a hold on Warsh's nomination, citing concerns about DOJ's 'unprecedented' criminal probe into Powell over testimony regarding Fed building renovations that Tillis says lacks criminal intent
• Overriding Tillis's committee hold would require a discharge vote needing 60 Senate votes, which is unlikely in the current divided chamber
• Powell's term expires in May 2026, and he publicly called the criminal investigation an example of threats against central bank independence

Summary

President Trump has nominated Kevin Warsh to replace Jerome Powell as Federal Reserve Chairman when Powell's term expires in May 2026. However, Warsh's confirmation faces an unexpected obstacle in the Senate.

Key Development:

Senator Thom Tillis (R-N.C.), a member of the Senate Banking Committee, has vowed to block any Fed nominee until the Justice Department concludes its criminal investigation into Powell. Tillis called the probe baseless, stating no reasonable person could construe Powell's committee testimony as having "criminal intent." He emphasized that protecting the Fed's independence from "political interference or legal intimidation is non-negotiable."

The Powell Investigation:

On January 11, 2026, Powell confirmed the DOJ opened a criminal investigation related to his congressional testimony about renovations of the Fed's Washington, D.C. headquarters buildings. Powell publicly called the move "unprecedented" and characterized it as part of ongoing threats from the Trump administration against the central bank.

Confirmation Process Implications:

Warsh requires Senate Banking Committee approval before a full Senate vote. Tillis's hold means bypassing the committee would require a discharge vote needing 60 Senate votes—unlikely in a divided chamber. The confirmation appears significantly delayed.

Background:

Powell, appointed by Trump in 2017, has led the Fed through multiple crises and is considered one of the most tested chairs in modern history. The current situation represents the most challenging period of his eight-year leadership, marked by escalating tensions over interest rate policy and central bank independence.