With Powell probe dropped, markets brace for what a Warsh-led Fed means for mortgages
Republican senator Thom Tillis’s decision to end his blockade of Kevin Warsh’s nomination as Federal Reserve chair removes the last major obstacle to a rapid leadership change at the US central bank, with direct implications for interest rates, markets and mortgage borrowers.
Tillis, a North Carolina Republican on the Senate Banking Committee, has tied his support for Warsh to the US Department of Justice dropping its criminal investigation into current Fed chair Jerome Powell. The probe focused on multibillion‑dollar renovation costs at the central bank’s Washington headquarters.
Once the DOJ turns the case over to the Fed’s inspector general, Tillis said the conditions he has set are met.
“I am prepared to move on with the confirmation of Mr. Warsh, I think he’s going to be a great Fed chair,” Tillis said on NBC’s “Meet the Press.”
“We were very clear that we have assurances from the DOJ that I needed to make sure they were not using the DOJ as a weapon to threaten the independence of the Fed. So this will allow Mr. Warsh to move on with his confirmation on time.”
Tillis framed the now‑ended probe as a systemic risk.
“If we had allowed this (investigation) to occur, I think it would have had devastating consequences for our financial systems and the markets worldwide,” he said.
DOJ officials assured Tillis that the case is “completely and fully ended” and that any appeal over earlier subpoenas would be about legal principles, not reviving the inquiry.
Jeanine Pirro of the US Department of Justice shifts scrutiny to the Federal Reserve watchdog, while the move clears a path for leadership changes and refocuses attention on rate policy risks.https://t.co/RW8LuiiPYB
— Mortgage Professional America Magazine (@MPAMagazineUS) April 24, 2026
Tillis said “we’ve got to deal with the affordability problem,” but added, “you’ve got to do it by the rules,” arguing that Warsh would act independently even if that means angering the White House “once or twice.”
In his confirmation hearing, Warsh signaled that he wants “regime change” at the Fed, including shifting how the central bank measures inflation and communicates with markets, and is widely expected to push more quickly for rate cuts.
He was nonetheless pressed by lawmakers over whether he would resist pressure from president Donald Trump to engineer faster easing in the face of rising energy costs and stubborn inflation.
Warsh framed the Fed’s autonomy as something that has to be continually justified, not assumed.
“Simply stated, Fed independence is largely up to the Fed,” Warsh said in the statement.
“I do not believe the operational independence of monetary policy is particularly threatened when elected officials — presidents, senators, or members of the House — state their views on interest rates.”
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