The Senate should move to advance Kevin Warsh, President Donald Trump’s nominee for Federal Reserve chairman, even as a federal criminal investigation into current Chair Jerome Powell continues, Treasury Secretary Scott Bessent said Friday.
Bessent, in an interview on CNBC’s “Squawk Box,” said he believes after speaking this week to Republicans on the Senate Banking Committee that they “are going to proceed” with a nomination hearing.
“I think it’s important to get the hearings underway, and I think we have an agreement to do that,” he said.
Sen. Thom Tillis, R-N.C., has vowed to block Warsh’s nomination from moving through the Banking Committee unless the Department of Justice drops its probe into Powell.
Trump, however, has said the criminal probe, led by U.S. Attorney for the District of Columbia Jeanine Pirro, should continue to the end, setting up a potential impasse. Powell, whom Trump appointed during his first term, has declined to lower interest rates as much or as quickly as the administration has pushed him to.
Tillis has also rejected an idea, which Bessent floated to Republican senators this week, to move the Powell investigation from the DOJ to the banking panel.
Bessent told CNBC that the White House “has no influence on what the U.S. attorney for D.C. does.”
“What I was proposing was that the Senate Banking Committee also investigate” the Powell matter, which centers on his prior testimony about cost overruns on an ongoing renovation of the Fed’s headquarters, Bessent said.
Banking Committee spokesman Jeff Naft, when contacted by CNBC after Bessent’s remarks, pointed to recent comments Chairman Tim Scott, R-S.C., made this week saying he thinks the committee will solve the Powell issue and that Tillis will ultimately back Warsh.
Bessent noted that the federal probe of Powell may not lead to criminal charges.
“We’ll see where the investigation goes with Jeanine Pirro’s office,” he said. “There were subpoenas issued. But that doesn’t have to mean that there are charges.”
“They reached out to the Fed in December via email, didn’t get responses, and then issued subpoenas. So we’ll see what the state of that is.”
After speaking privately with Senate Republicans on Tuesday, Bessent said, “my understanding is that we are going to proceed with the hearing.”
Tillis, speaking on Bloomberg TV later Friday morning, said he does not intend to back down from holding up Warsh’s confirmation until the Powell investigation is ended. Tillis is retiring from the Senate when his term ends.
“We could have a hearing all we want, but until the investigation is done, I still believe that the initial inquiry and the investigation was a flex to try and get the current chair to step aside,” Tillis said
“I have no intention of allowing any Fed board nominee to move forward out of committee and to be confirmed, until this matter is settled,” he said. “This is foundational to Fed independence, and I, for one, am going to stand on the side of certainty, and Fed independence is what delivers certainty in our markets.”
— Emily Wilkins contributed to this story.
