A shift in the Senate removes a major obstacle for President Trump's pick to lead the Federal Reserve, with a confirmation vote now expected within days.
(Washington) — Senator Thom Tillis has dropped his opposition to Kevin Warsh’s nomination as Federal Reserve Chair, clearing a significant roadblock for President Donald Trump’s choice to lead the U.S. central bank. The move follows the Justice Department’s decision to close an investigation into current Chair Jerome Powell, whose term is scheduled to end on May 15.
“I am prepared to move on with the confirmation of Mr. Warsh. I think he’s going to be a great Fed chair,” Tillis told NBC on Sunday. The North Carolina Republican’s opposition had previously stalled the nomination in the Senate Banking Committee, creating uncertainty around the Fed’s leadership as a key deadline approached.
The reversal came after the U.S. attorney for the District of Columbia ended a review of the Fed’s $2.5 billion building renovation, a project criticized by the White House for cost overruns. Tillis had described the inquiry as a politically motivated attempt to pressure Powell, and said he received assurances from the Justice Department that the matter was "completely and fully settled."
With Tillis’s support, the Senate Banking Committee has scheduled a vote on Warsh’s nomination for Wednesday. A full Senate vote could follow as soon as the week of May 11, potentially installing the former Fed governor as the head of the central bank just days after Powell’s tenure concludes.
The focus now shifts to how Warsh, a former Morgan Stanley banker and Fed governor during the 2008 financial crisis, might steer monetary policy. He has been viewed as hawkish on fiscal policy, an approach that could strengthen the dollar but potentially hurt risk assets like equities and cryptocurrency by favoring higher interest rates.
However, President Trump has repeatedly pressured the Fed to cut rates to stimulate the economy. At a hearing last week, Warsh pledged to be an “independent actor” if confirmed, stating he had not promised the White House he would cut rates. This contrasts with the President’s public desire for immediate rate cuts.
The crypto market is watching the nomination closely. Warsh is considered friendly to the digital asset industry, with recent investment disclosures indicating exposure to more than 30 different crypto projects, including Solana and the decentralized exchange dYdX. His leadership could bring a more favorable regulatory view toward the sector, though his broader monetary policy stance creates a complex picture for crypto assets, which have traditionally benefited from lower-rate environments. As the confirmation vote nears, market participants are weighing the potential for a more crypto-literate Fed against the possibility of a more hawkish monetary policy.
This article is for informational purposes only and does not constitute investment advice.
