A North Carolina Republican said Tuesday there is nothing Federal Reserve Chairman candidate Kevin Warsh can say to get Sen. Thom Tillis to lift the lockdown with Warsh’s approval.
Mr. Tillis has vowed not to vote for any Fed nominee, including Mr. Warsh, until the criminal investigation into Fed Chairman Jerome Powell is resolved. Mr. Powell has denied any wrongdoing, but said he was actually targeted for refusing to cut rates broadly and quickly as requested by President Donald Trump.
“No, no,” Tillis told reporters at the Capitol when asked if Warsh could say anything at a meeting later in the day to change the senator’s position on blocking a full Senate vote on the nomination.
“This is not a people issue, it’s a process issue,” Tillis said. “I think this is a foul.”
Mr. Tillis told reporters after the meeting that he would vote against moving Mr. Warsh’s nomination to the Banking Committee if Mr. Powell’s investigation is not completed by then.
“This is about the fundamental principle of Fed independence,” the senator said. “The reason I took such a strong position so early is because we have no real idea what would happen to the market if there was suddenly widespread recognition that the Fed chair is serving at the pleasure of the president, right?”
In addition to the pending Powell investigation, Tillis noted that the Supreme Court has not yet decided whether President Trump has the authority to fire Fed Director Lisa Cook.
Trump claimed he wanted to fire Cook because he alleged that Bill Pelt, the head of the Federal Housing Finance Agency, had committed mortgage fraud. But Ms. Cook’s defenders, who also deny wrongdoing, say she is being targeted like Mr. Powell because she opposes President Trump’s interest rate demands.
Tillis on Tuesday called the effort to fire Cook “second-rate.”
“The person who came up with that idea should also be fired,” the senator said.
Tillis said Tuesday he is “already impressed” with Warsh’s skills.
“I’ve known about his work for quite some time, which is why I’m so frustrated that I can’t vote until he resolves other issues,” Tillis said.
The senator noted that he and other members of the Senate Banking Committee were witnesses to Chairman Powell’s testimony before the committee regarding the multibillion-dollar renovation of the Federal Reserve’s headquarters in Washington, D.C.
Powell said he is being investigated by the U.S. Attorney’s Office in Washington in connection with the project and his testimony before the Banking Committee.
“Seven members of the Banking Commission were witnesses at the crime scene and testified that no crime took place,” Tillis said Tuesday.
“Why are we still having these discussions and fielding great candidates?” Tillis asked.
“I think it goes back to a young American lawyer with dreams who had a false basis for the investigation,” he said. “They need to acknowledge that and move away from that for us to acknowledge him.”
Wyoming Republican Sen. Cynthia Lummis praised Warsh after speaking with him on Tuesday.
“I had an incredibly productive and thoughtful conversation with Kevin Warsh today,” Lummis said in a statement.
“I have always argued that the United States needs a transparent and accountable Federal Reserve that embraces, rather than stifles, financial innovation such as digital assets.” “This is critical to our nation’s financial future, and I look forward to speaking with him further to learn how he plans to modernize the Fed and hold it accountable to the American people and to our representatives in Congress.”
