Powell Vows to Stay, Imperiling Trump's Fed Chair Nominee

Powell Investigation Halts Confirmation of Trump's Fed Pick

President Trump's nomination of former Fed official Kevin Warsh to lead the central bank is effectively frozen. The confirmation process is blocked by Senator Thom Tillis, who has pledged not to advance any Fed nominees through the Senate Banking Committee until the Department of Justice drops its investigation into current Chair Jerome Powell. The probe, led by U.S. Attorney Jeanine Pirro, centers on the Fed’s $2.5 billion headquarters renovation, which Trump has publicly criticized. A federal judge recently dealt the investigation a major blow, throwing out subpoenas and writing that "abundant evidence" suggests their purpose was to harass Powell into resigning. Despite the ruling, Pirro has vowed to appeal, ensuring the political gridlock continues.

Powell Vows to Remain Past May, Holds Rates at 3.75%

Responding to the political pressure, Jerome Powell has adopted a defiant stance, stating he has "no intention of leaving the board until the investigation is well and truly over, with transparency and finality." While Powell's term as chair ends in May, his term as a board governor runs until 2028. This opens the possibility he could remain as interim chair if no successor is confirmed, or stay on as a governor, denying Trump an opportunity to fill another seat. The leadership battle unfolds as the Fed held its key interest rate steady at a range of 3.5% to 3.75%, navigating economic uncertainty while its own governance is under political assault.

Warsh Faces Additional Scrutiny from Senate Democrats

Beyond the procedural blockade, Kevin Warsh faces separate challenges to his nomination. Senator Elizabeth Warren, a key Democrat on the Banking Committee, has demanded Warsh clarify his past connections to the convicted sex offender Jeffrey Epstein, citing emails from 2010. Warren, who previously labeled Warsh a "sock puppet" for his perceived alignment with Trump's desire for lower interest rates, is leveraging these new questions to scrutinize his suitability. This multi-front opposition from both sides of the aisle casts significant doubt on Warsh's ability to secure confirmation, even if the investigation into Powell is eventually resolved.