TLDR
- North Carolina Senator Thom Tillis withdrew his opposition to Kevin Warsh’s Federal Reserve chair nomination following the Department of Justice’s decision to end its investigation into Jerome Powell
- A confirmation vote in the Senate Banking Committee is set for April 29, followed by a potential full Senate floor vote during the week of May 11
- Jerome Powell’s term as Fed chair concludes on May 15; Warsh may assume the position soon after Senate approval
- Financial markets indicate a 99% likelihood that the Federal Reserve will maintain interest rates between 3.50%–3.75% during the April 28–29 policy meeting
- CME FedWatch data suggests no rate reductions are anticipated before September 2027
Kevin Warsh has moved significantly closer to securing the Federal Reserve chairmanship following the removal of a critical Republican senator’s obstruction to his confirmation.
Senator Thom Tillis from North Carolina announced over the weekend that he would now endorse Warsh’s appointment. The senator had previously stalled the confirmation proceedings due to an ongoing Department of Justice inquiry examining current Federal Reserve Chair Jerome Powell concerning a multi-billion-dollar renovation project at the Fed’s Washington headquarters.
With the DOJ concluding its three-month investigation, Tillis reversed his position. In a statement shared on X, he characterized the probe as “a serious threat to the Fed’s independence” and emphasized that its resolution was necessary before he could proceed with supporting Warsh’s candidacy.
As a member of the Senate Banking Committee, Tillis’s endorsement carries significant weight. The committee has scheduled its confirmation vote for April 29.
Following committee approval, the nomination advances to the complete Senate for consideration. While no official date has been announced, sources indicate that a final floor vote could take place sometime during the week beginning May 11.
Jerome Powell’s tenure as Federal Reserve chair officially expires on May 15. Should the Senate confirm Warsh, he could be sworn in as early as the following week.
While Powell retains eligibility to serve on the Federal Reserve’s Board of Governors through 2028, historical patterns suggest he may opt to step down entirely once his leadership term concludes.
What Markets Expect From the Fed
The Federal Open Market Committee meeting scheduled for April 28–29 will mark Powell’s final session as chairman. Market participants are not anticipating any dramatic policy shifts.
According to CME Group FedWatch data, there is a 99% probability that the Federal Reserve will keep interest rates unchanged at the current 3.50%–3.75% target range. The likelihood of a rate increase stands at merely 1%.
Matthew Luzzetti, Chief Economist at Deutsche Bank, indicated that the Fed’s messaging is expected to remain aligned with previous communications, signaling that policymakers plan to maintain current rates for an extended timeframe.
Market pricing doesn’t incorporate any rate cuts until September 2027. At that juncture, there’s a 38.6% probability that rates could decline to the 3.25%–3.50% band.
Global geopolitical instability, particularly developments related to the Iran crisis, continues to create economic headwinds. Escalating energy costs are contributing to inflationary pressures, while broader uncertainty is dampening corporate capital expenditure.
Warsh’s Stance on Crypto and Rates
Warsh has traditionally been characterized as a monetary policy hawk. This philosophy generally translates to maintaining elevated interest rates for prolonged periods, which tends to negatively impact speculative investments such as cryptocurrencies.
Nevertheless, Warsh has recently stated that the Federal Reserve will preserve its independence and that President Trump has not attempted to influence his views on interest rate policy.
Regarding cryptocurrency, Warsh revealed personal holdings in over 30 digital asset projects, including positions in Solana and the decentralized trading platform dYdX.
Warsh has also voiced skepticism about the Federal Reserve’s substantial portfolio of Treasury securities and mortgage-backed securities, an approach that emerged from the central bank’s response to the 2008 financial crisis.
The Senate Banking Committee’s April 29 vote represents the initial official milestone in his confirmation journey.
