Tillis Steps Aside and Kevin Warsh Is Now on Track to Lead the Federal Reserve

For months, Kevin Warsh’s path to the Federal Reserve chairmanship ran straight through one Republican senator who refused to budge: Thom Tillis of North Carolina. Tillis had made clear he would block Warsh’s confirmation until the Justice Department dropped what he called an illegitimate criminal probe of current Fed Chair Jerome Powell. On Friday, the DOJ dropped it. On Sunday, Tillis dropped his block.

The Senate Banking Committee is now expected to vote Wednesday on Warsh’s nomination. A floor vote could follow before Powell’s term as chair expires on May 15.

Tillis had made his position clear since January, when U.S. Attorney Jeanine Pirro’s office served the Federal Reserve with subpoenas targeting Powell over cost overruns in the multibillion-dollar renovation of the Fed’s Washington headquarters. Tillis called the investigation a “bogus” and “vindictive prosecution” and announced he would not allow any Fed nominees through the Senate Banking Committee while it remained active.

Tillis maintained it was not opposition to Warsh, but opposition to the DOJ investigation. At Warsh’s confirmation hearing last Tuesday, Tillis said, “Let’s get Warsh in there. Let’s get Chair Powell comfortable with actually exiting at some point, not to 2028, and do that by eliminating a bogus investigation that started this whole drama.”

The investigation itself had already taken serious hits in court. A federal judge quashed the DOJ’s subpoenas earlier this year, describing their purpose as “to harass and pressure Powell to resign.” A prosecutor handling the case acknowledged at a closed-door hearing that the government had found no evidence of a crime.

On Friday, Pirro announced on X that her office was closing the investigation, redirecting scrutiny of the headquarters renovation to the Federal Reserve’s inspector general, who had already launched a probe of the project last July.

“This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns — in the billions of dollars — that have been borne by taxpayers,” Pirro wrote. “Accordingly, I have directed my office to close our investigation as the IG undertakes this inquiry.”

This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns – in the billions of dollars – that have been borne by taxpayers.

The IG has the authority to hold the Federal Reserve accountable to American taxpayers. I…
— US Attorney Pirro (@USAttyPirro) April 24, 2026

Pirro also said she would not hesitate to restart a criminal investigation if the facts warranted it.

Senate Banking Committee Chairman Tim Scott of South Carolina welcomed the move and invited the inspector general to brief the committee within 90 days.

The renovation project drove the controversy. The Fed’s own accounting shows costs grew from an initial estimate of roughly $1.9 billion to around $2.5 billion, with the central bank attributing the increase to unforeseen asbestos, a sinkhole, and rising costs of materials and labor. The project was first approved in 2017, a year before Powell became chair. That detail drew considerably less attention in the political coverage than the cost increases.

I have been clear from the start: the U.S. Attorney’s Office criminal investigation into Chair Powell was a serious threat to the Fed’s independence, and it needed to end before I could support Kevin Warsh’s confirmation. I welcome the Inspector General's investigation. This is a…
— Senator Thom Tillis (@SenThomTillis) April 26, 2026

Tillis told NBC News on Sunday that he had received direct assurances from Justice Department officials that the probe was “completely and fully ended” and that reopening it would require a criminal referral from an inspector general. That was the commitment he needed.

“I feel like there were prosecutors in D.C. that thought this was going to be a lever to have Mr. Powell leave early,” Tillis said. “May we find a little stupid here in terms of somebody responsible for the project making a decision they shouldn’t? Maybe. But it doesn’t rise to a criminal prosecution.”

His stated concern was not the renovation numbers but whether the DOJ was being used as a tool to muscle out an independent institution’s leadership. “I needed to feel like they were not using DOJ as a weapon to threaten the independence of the Fed,” Tillis said.

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Editor’s Note: The 2026 Midterms will determine the fate of President Trump’s America First agenda. Republicans must maintain control of both chambers of Congress.

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