Trump nominates Kevin Warsh as Fed chair; Tillis blocks confirmation over Powell probe

President Trump nominated Kevin Warsh as Federal Reserve chair on Jan. 30, 2026. Warsh served on the Fed's board from 2006 to 2011, becoming the youngest governor in history at age 35. He currently works as a fellow at Stanford's Hoover Institution. If confirmed, he would replace JPJerome Powell when Powell's term expires in May 2026.

Sen. TTThom Tillis (R-NC) announced he will block any Fed nominee until the DOJ ends its criminal investigation of Powell. Tillis called the investigation evidence that Trump advisers are 'actively pushing to end the independence of the Federal Reserve.' He sits on the Senate Banking Committee, which has 13 Republicans and 11 Democrats.

The DOJ opened a criminal investigation into Powell in January 2026 over his congressional testimony about a $2.5 billion renovation of Fed headquarters. Rep. Anna Paulina Luna (R-FL) referred Powell to DOJ for potential perjury. Powell says the real reason is his refusal to cut interest rates as fast as Trump demanded.

The Fed headquarters renovation involves two historic buildings from the 1930s. Costs rose from $1.9 billion to $2.5 billion due to historic preservation requirements, COVID supply chain disruptions, Trump-era tariffs, and unexpected asbestos removal. The Fed pays for renovations from its own operations, not taxpayer dollars.

Sen. LMLisa Murkowski (R-AK) joined Tillis in opposing Fed nominees. She called the DOJ probe 'nothing more than an attempt at coercion' and warned that 'if the Federal Reserve loses its independence, the stability of our markets and the broader economy will suffer.' She praised Tillis for 'blocking any Federal Reserve nominees until this is resolved.'

Senate Majority Leader John Thune (R-SD) told NBC News that without Tillis's support, Warsh 'probably' cannot win confirmation. A discharge vote to force the nomination out of committee requires 60 votes, which is unlikely in the divided Senate.

Powell responded to the investigation in a video statement, saying 'the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.' He called it 'unprecedented' and politically motivated.