By Nick Timiraos
Kevin Warsh's path to leading the Federal Reserve took a key step forward this week -- and possibly two steps back.
On the same day that the Senate Banking Committee announced the date of his confirmation hearing to become the next Fed chairman, prosecutors from U.S. Attorney Jeanine Pirro's office sought to escalate the very investigation that threatens to delay his appointment.
Then, in a Fox Business interview that aired Wednesday morning, President Trump made a full-throated defense of the probe of Chair Jerome Powell related to the renovation of the Fed's headquarters.
The confirmation faces a roadblock led by Sen. Thom Tillis (R., N.C.), who has vowed not to advance any Fed nomination until the Justice Department ends its probe.
In the interview, Trump both dismissed Tillis's stand as the empty threat of a retiring lawmaker and acknowledged the possibility that Tillis might not back down, delaying Warsh's confirmation. In that case, Trump said he would fire Powell if Powell exercises his option to stay at the Fed after his term as chair ends May 15. He is eligible to stay on the Fed's board until 2028.
When asked why he wouldn't end the probe to clear a path for Warsh, Trump instead repeated his grievance over construction cost overruns. "Don't you think we have to find out what happened there?" he said.
Far from winding down, the investigation may be entering a new chapter. Two prosecutors and a criminal investigator showed up unannounced at the central bank's sprawling construction site and asked for a tour on Tuesday. They were turned away, The Wall Street Journal reported.
An outside lawyer for the Fed, Robert Hur, objected to the visit, arguing in a letter that the prosecutors had tried to circumvent a federal judge's ruling last month that threw out subpoenas issued to the central bank. The judge, James Boasberg, said the investigation appeared designed to pressure Powell to lower rates or resign.
Pirro defended the probe in a statement Tuesday night. "Any construction project that has cost overruns of almost 80 percent over the original construction budget deserves some serious review," she said.
For Warsh, the spectacle carries a particular irony. He is no stranger to a bruising nomination battle. As a college intern, he worked on Clarence Thomas's Supreme Court confirmation in 1991. As a White House aide in 2005, he helped shepherd Ben Bernanke's uneventful but heavily scrutinized confirmation to succeed Alan Greenspan as Fed chair.
Now the fight is his own, and the immediate obstacle isn't Democratic opposition or policy disagreements -- but a criminal investigation cheered on by the president who nominated him.
The congressional hearing is set for April 21, leaving 24 days for the Senate to confirm Warsh before Powell's term ends. The Senate is scheduled to be in session for 13 of those days.
Tillis has repeatedly rejected any assertion that he will back down and mocked the investigation on Tuesday night. He posted an image of the Three Stooges on social media with the caption, "The U.S. Attorney's Office for D.C. at the crime scene."
Republicans enjoy a 13-11 majority on the banking committee. Without Tillis's support, any nomination could stall.
Even without the investigation subplot, next week's hearing was shaping up to be a high-wire act. Warsh is likely to face pointed questions about Fed independence and interest-rate policy at a moment when the economic picture is turbulent. With energy prices climbing due to war in the Middle East, central bankers around the world are grappling with another supply shock that threatens to make consumers and businesses more tolerant of price increases.
If energy and commodity bottlenecks persist, central bankers will focus on whether they should be raising rates rather than cutting them, as Trump expects. That could force Warsh to take sides before he's even confirmed -- endorsing Trump's view and risking his credibility with markets, or defending the Fed's wait-and-see posture and upsetting the president.
Trump made clear what he expects in the interview that aired Wednesday. Asked whether rates would fall this year, he said, "When Kevin gets in, I do."
Write to Nick Timiraos at Nick.Timiraos@wsj.com
(END) Dow Jones Newswires
April 15, 2026 11:31 ET (15:31 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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