“The U.S. Attorney’s Office’s criminal investigation into Chairman Powell was a serious threat to the Fed’s independence and had to be ended before I could support the confirmation of Kevin Warsh,” Tillis said online. Since the investigation is now closed, he will support the “excellent candidate” Warsh.
Tillis sits on the Senate Banking Committee. With a dissenting vote in the committee, he could have blocked the succession process. In that case, the committee would not have been able to send Warsh’s nomination to the full Senate floor for a confirmation vote.
The US judiciary ended its criminal investigation against the current central bank chairman Powell on Friday. His term of office ends on May 15th. Trump had repeatedly attacked the 73-year-old harshly and, among other things, called him an “imbecile” and a “loser.” The reason was that, in Trump’s opinion, the Fed chief was too hesitant to cut key interest rates.
Presumably at Trump’s initiative, the legal authorities began criminal investigations against Powell for allegedly massively inflated costs in the renovation of the Fed headquarters in Washington. These were discontinued on Friday; instead, an internal supervisory authority is to review the renovation costs.
Federal prosecutor Jeanine Pirro announced the discontinuation of the investigation, but at the same time stated that she would “not hesitate” to reopen it “should the facts justify it.” On Saturday, Trump also said he had a “duty” to find out why renovation costs had skyrocketed.
Senator Tillis said on Sunday that he had received “assurances” that the case would only be reopened if the findings of the Fed’s internal regulator warranted it. It is now time for the Fed to “put this distraction behind it and fully focus on its mission.”
The US Federal Reserve meets on Tuesday and Wednesday and decides on the key interest rate. It is likely to be the last two-day Fed meeting under Powell. Economists expect the bank to keep the key interest rate stable again.
