Tillis Drops Warsh Block After DOJ Ends Powell Probe, Clearing Fed Fight

Senator Thom Tillis has dropped his objection to Kevin Warsh’s confirmation after the Justice Department ended its probe into Jerome Powell, clearing a major political obstacle around the Federal Reserve chairmanship fight.

• Tillis flips after DOJ ends the Powell probe
• Fed independence was the real fight
• Warsh confirmation may now move faster
• Powell stays in place for now, but the clock is ticking

Tillis told NBC News he had received the assurances he needed from the Department of Justice, saying the investigation into Powell was “completely and fully ended.” He said that was important because he did not want to see the DOJ used “as a weapon to threaten the independence of the Fed.”

That’s the core of this mess. Kevin Warsh, a former Federal Reserve governor and Donald Trump’s pick to lead the central bank, had run into resistance because Tillis believed the DOJ probe into Powell risked turning law enforcement into political leverage. Once that pressure point disappeared, so did Tillis’s block.

The Federal Reserve is supposed to set monetary policy based on economic data, not on whatever tantrum is being thrown in Washington that week. In plain English, Fed independence means interest rates should be guided by inflation, employment, and financial stability — not revenge politics dressed up as oversight. When that line gets blurred, confidence starts leaking out of the system.

The DOJ announced Friday that it was ending the Powell probe. U.S. Attorney for the District of Columbia Jeanine Pirro said the department was stepping aside so Federal Reserve Inspector General Michael Horowitz could keep reviewing the building-cost overruns tied to the Fed’s renovation projects. Horowitz had already examined the issue in 2021 and found no wrongdoing, and Powell asked for a second review last July.

Acting Attorney General Todd Blanche said the DOJ would let Horowitz handle the matter while prosecutors stepped back. That distinction matters. An inspector general review is oversight; a criminal probe is a very different beast. One checks the books and the process. The other can hang like a guillotine over a public official’s head, whether or not the evidence is actually worth a damn.

There was also some legal smoke around the whole thing. In March, a federal judge blocked subpoenas from Pirro’s office, saying they were backed by “essentially zero evidence.” That is a brutal line from the bench and a pretty strong hint that the prosecution side of this had a weak foundation. If you’re going to drag a Fed chair through the mud, you’d better have more than vibes and political theater.

Tillis had already made his view on Warsh pretty clear. He previously called him “a perfect candidate,” and after Warsh’s hearing he doubled down, saying:

“Let’s get Warsh in there.”

He also described the probe as a “bogus investigation” that helped create “this whole drama.” On that point, he was not exactly whispering. His argument was that as long as Powell appeared to be trapped under a criminal cloud, the White House and its allies could keep squeezing the Fed chair and muddying the institution’s independence.

Tillis also said:

“Let’s get Chair Powell comfortable with actually exiting at some point, not to 2028, and do that by eliminating a bogus investigation that started this whole drama.”

That quote gets at the weird little limbo Powell has been stuck in. He remains Fed chair for now, and there’s even the unusual possibility that he could stay on as a governor after his chair term ends. That would be rare, but Washington has never been allergic to awkward arrangements when power and ego are involved.

Tillis stressed that he was not trying to prejudge what the review might uncover. He said:

“He has a lot of tools. He can talk to people, and he can look at records.”

And he added:

“I’m not going to pre-judge what the investigation will find… That wouldn’t be fair to the process.”

That’s a fair enough position. Oversight is not the problem. The problem is when oversight starts smelling like a political hit job. You can criticize the Fed — and plenty of people should — without turning the DOJ into a blunt instrument for settling scores.

The Senate Banking Committee is expected to move Warsh’s nomination to the full Senate on Tuesday. With Tillis no longer standing in the way, the confirmation process could now move much more quickly. That doesn’t guarantee smooth sailing, but it removes one of the most obvious political landmines.

The timing matters, too. The Federal Reserve is expected to leave interest rates unchanged at its next meeting while it weighs the economic fallout from the Iran war and rising energy prices. That is not a trivial backdrop. Geopolitical conflict can feed into oil, shipping, and inflation expectations fast, which is exactly the kind of macro noise the Fed loves to pretend it can model perfectly right up until reality slaps it in the face.

For Bitcoin and crypto markets, this is not some distant Beltway soap opera. Fed policy influences liquidity, borrowing costs, the dollar’s strength, real yields, and risk appetite — all major variables for BTC and broader crypto pricing. If the central bank is pressured into making decisions for political reasons instead of economic ones, markets get less predictable and trust erodes. And if there’s one thing crypto already has to fight, it’s a trust deficit created by banks, bureaucrats, and a parade of unelected clowns with good suits.

That said, it’s worth playing devil’s advocate for a second. Fed independence is important, but so is accountability. Central bankers are not holy priests handed divine wisdom from the cloud. The Fed has made its share of mistakes, from policy whiplash to inflation misreads to opaque backroom habits that deserve scrutiny. The answer is not blind worship of the central bank — it’s making sure criticism is based on evidence, not political revenge dressed up as law enforcement.

Warsh’s return would also signal something broader about where monetary policy may be headed. He has long been seen as a central banking insider with a more hawkish reputation than some of Powell’s critics would like. That could mean a harder line on inflation and a more traditional policy posture, though anyone pretending to know exactly how a future Fed chair will behave is usually selling something. Usually nonsense.

What changed for Thom Tillis?

He says the DOJ gave him assurances that the Powell probe was fully ended, so he no longer sees it as a threat to Federal Reserve independence.

Why was Tillis blocking Kevin Warsh?

Because he believed the investigation into Powell could be used as political pressure against the Fed.

What happened to the Powell probe?

The Department of Justice said it was dropping the criminal probe and letting the Federal Reserve Inspector General continue reviewing the building-cost issue.

Who is handling the review now?

Federal Reserve Inspector General Michael Horowitz is continuing the oversight review of the renovation-related cost overruns.

Does this mean Jerome Powell is out?

No. Powell remains Fed chair for now, and he could potentially stay on as a governor after his chair term ends, though that would be unusual.

Why does Fed independence matter?

Because monetary policy is supposed to be driven by economic data, not by political pressure, grudges, or lawfare.

Why should Bitcoin holders care?

Because Fed decisions affect liquidity, rates, inflation expectations, and market conditions that ripple into Bitcoin and the rest of crypto.

What happens next for Kevin Warsh?

The Senate Banking Committee is expected to advance his nomination to the full Senate, and the process could move more quickly now that Tillis has dropped his objection.

The bigger takeaway is simple: this wasn’t just about one nomination or one renovation bill. It was about whether U.S. institutions can be turned into tools for political pressure. If that becomes normal, trust in the Fed — and in the broader machinery of monetary policy — takes a hit. And once trust goes, markets notice fast.