Senate Panel Advances Kevin Warsh After DOJ Drops Powell Probe

The Senate Banking Committee on Wednesday advanced Kevin Warsh’s nomination along party lines after a federal prosecutor said she would drop an investigation involving Federal Reserve Chair Jerome Powell. The committee vote clears a major procedural hurdle and sends the nomination to the full Senate for debate and a confirmation vote likely in the coming weeks.

Warsh was nominated by President Donald Trump in January. His confirmation had been stalled by a hold from Republican Senator Thom Tillis of North Carolina, who conditioned his support on the end of the inquiry into Powell. At a committee hearing last week, Tillis told Warsh, “You have extraordinary credentials. They’re impeccable,” and said resolving the probe would allow him to back the nomination.

On Friday, U.S. Attorney Jeanine Pirro announced she would drop the investigation. Tillis then removed his objection and joined Republicans in advancing Warsh. Pirro later warned she “wouldn’t hesitate” to reopen the matter, a remark that Democrats highlighted during Wednesday’s session.

Democrats on the committee raised questions about Warsh’s independence from the president and about his financial holdings. Elizabeth Warren, the panel’s top Democrat, criticized the timing and tenor of the investigation and said, “No one is fooled.” She also accused Warsh of being insufficiently independent from the president and, referring to his reluctance at the hearing to name a policy on which he disagreed with the president, called him “a Trump sock puppet who is so cowed by the president he could not even say that Donald Trump lost the 2020 election.”

Committee Republicans defended the nominee. Tillis accused Democrats of seeking political points and expressed confidence that the inquiry was finished. Supporters pointed to Warsh’s prior experience at the Fed and his business background as qualifications for the role.

Warsh served on the Federal Reserve Board of Governors from 2006 to 2011 and is a lecturer at the Stanford Graduate School of Business. At his confirmation hearing he advocated what he described as a “policy regime change much more focused on interest rates” rather than on large-scale asset purchases, a reference to quantitative easing. Since the Great Recession, the Fed has used large purchases of Treasury and mortgage-backed securities to support markets; critics link those purchases to higher inflation, while supporters say they stabilized the economy during crises.

Warsh’s financial disclosures show a portfolio valued at more than $130 million with dozens of positions tied to crypto and decentralized finance. Filings list investments in platforms such as Compound and derivatives venues including dYdX and Lighter, as well as holdings linked to blockchains including Solana, Optimism, Blast and Zero Gravity. Democrats questioned how those holdings might affect Warsh’s decision-making if he becomes Fed chair.

With the Banking Committee vote complete, the nomination moves to the full Senate. A confirmation vote will require Republican unity and support from any swing senators whose votes could determine the outcome.