S enator Thom Tillis (R-N.C.) will oppose confirming Kevin Warsh as Fed chair until the Justice Department's criminal investigation into Jerome Powell is resolved. Kevin Warsh needs a majority approval vote in the Senate to be confirmed as Federal Reserve chair.
Related Brief 3h ago
monetary policy Powell's Governor Term Protects Interest Rate Voting Rights Despite Dismissal Threat
Jerome Powell retains voting rights on the Federal Open Market Committee to set benchmark interest rates until 2028. This remains true even if he is dismissed as chair. Donald Trump has threatened to dismiss Powell if he does not step down by the 15th of next month, the date his term as chair ends. Powell intends to serve as interim chair until a successor is confirmed by Congress, citing the Federal Reserve Act and precedent. Trump has nominated Kevin Warsh as successor. Senator Tom Tillis has stated he will oppose Warsh's confirmation until a federal prosecutor's investigation into Powell is resolved. The prosecutor is investigating Powell for alleged perjury before Congress regarding a $2.5 billion renovation of the Federal Reserve building. Powell's term as a Federal Reserve Governor extends until 2028.
The investigation, led by U.S. Attorney Jeanine Pirro, centers on the Federal Reserve's $2.5 billion building renovation project. A U.S. judge upheld subpoenas issued as part of the probe, which will likely lead to an appeal that further delays the installation of a new Fed chief.
Related Brief 1h ago
monetary policy Federal Reserve Chairman Jerome Powell's term term ends May 15
President Donald Trump has threatened to fire Jerome Powell if he does not step down when his term as chair ends May 15. The move comes after a series of confrontations between the administration and the Federal Reserve. U.S. attorneys from the Washington D.C. office have been leading a criminal probe into Powell, which focuses on Powell's testimony to Congress regarding cost overruns in a multibillion-dollar multibillion-dollar office renovation project. The investigation seeks to determine if public money was wasted and if Powell Powelly made false statements to Congress. U.S. Attorney Jeanine Pirro, citing an 80% cost overrun, stated the project deserves review. Chief Judge James Boasberg, however, ruled that the DOJ's probe was driven by President Donald Trump's political animus toward Powell, and effectively blocked the investigation. Following this ruling, DOJ prosecutors Carlton Davis and Steven Vandervelden, and a case agent, made an unannounced visit to the Fed's construction site to request a tour. Fed management denied them access to the site without preauthorized clearance. The prosecutors were turned away. President Donald Trump has again threatened to fire Powell if he does not step not step down when his term as chair ends May 15.
President Donald Trump has threatened to fire Powell, whose term as Fed chief ends May 15, but whose term as a board of governors seat extends to 2028. Powell has stated he will not leave his post until the investigation is complete.
Related Brief 10h ago
monetary policy Federal Reserve leadership transition creates path for rate cuts despite inflation
Equities and risk assets would see improved multiples through reduced discount rates if the Federal Reserve shifts toward a more dovish policy. This path depends on the confirmation of Kevin Warsh as Chairman and the subsequent departure of Jerome Powell from the Board of Governors. Warsh, the current nominee, favors rate cuts driven by the view that AI-driven productivity gains act as a medium- to long-term disinflationary force. If confirmed, Warsh would lead an FOMC where eight of twelve voting members skew neutral-to-dovish. The FOMC has never outvoted the Chair's position. Jerome Powell's term as Chairman ends May 15, 2026, but his term as a Governor extends to January 2028. A Department of Justice criminal investigation into Federal Reserve renovation projects complicates Powell's exit, and Senator Thom Tillis has made the dismissal of this probe a condition for his support of Warsh's nomination. Powell's departure from the Board would remove a potential anchor for the status quo and allow Warsh to build consensus for 2-3 rate cuts totaling 50 to 75 basis points by year-end 2026.
The Federal Reserve was designed to be an independent entity to prevent direct interference from the White House or Congress to ensure longer-term monetary policymaking.
Related Brief 17h ago
monetary policy Political pressure on the Federal Reserve reveals the risk of inflation
Inflation can get out of control if central banks fall under the control of politicians who aim to borrow more cheaply. Donald Trump has repeatedly urged the Federal Reserve to slash interest rates to cut the government's borrowing costs on its $39tn debt. In a January Truth Social post, Trump wrote that the US should be paying the lowest interest rate of any country in the world. Former Fed chair Janet Yellen compared this approach to the actions of a "banana republic," stating that the president of a developed country expressing the view that interest rates should be set to reduce debt service costs is a characteristic of such regimes. Central bank independence is compromised by presidential pressures.
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