Three months after Donald Trump announced his nomination, the confirmation process for Kevin Warsh is finally moving forward. Jerome Powell's successor at the helm of the Fed will testify before the Senate Banking Committee on Tuesday, April 21.
The nomination must be approved by a majority of the committee members before a full Senate vote. However, with a very small majority on the committee (13-11), a single Republican senator's opposition is enough to halt the entire process.
As a reminder, Jerome Powell received a grand jury subpoena in early January regarding the renovation of the Fed's headquarters and potential perjury during his Congressional testimony last June. Since then, North Carolina Republican Senator Thom Tillis has been blocking all Fed appointments.
In March, a federal judge blocked subpoenas issued by the Department of Justice, which could have provided an exit strategy for the Trump administration. However, the US Attorney for the District of Columbia, Jeanine Pirro, immediately vowed to appeal. On Tuesday, investigators from her office even made an unannounced visit to the Fed's renovation site, where they were told to schedule an appointment.
In an interview aired yesterday on Fox Business, Donald Trump indicated his desire to see the investigation continue and renewed his threats to fire Jerome Powell if he does not leave the Fed. "Well, I'm going to have to fire him, okay?"
Jerome Powell's term as Fed Chair expires on May 15. In March, he confirmed he would remain in his post until his successor is confirmed, as is customary in such situations. He would then serve as "Chair pro tempore." Powell also signaled that he would remain on the Fed Board until the Justice Department's investigation concerning him is fully resolved.
If all parties - Pirro/Trump, Powell, and Tillis - maintain their positions, the deadlock could persist until the midterms. On that occasion, one-third of the Senate seats will be up for election, and Senator Tillis has announced he will not seek re-election.
One unknown remains in this affair: Jerome Powell's presence at the Fed beyond the resolution of the judicial investigation. His term as a Fed Governor runs until January 2028. Historically, outgoing Fed Chairs resign from the Board, but nothing prevents him from staying. During his last press conference, Powell indicated he would make his decision based on what he believes "is best for the institution and the public we serve."
