WASHINGTON — President Donald Trump’s pick to lead the Federal Reserve was one step closer to the job Wednesday after North Carolina Republican U.S. Sen. Thom Tillis cast the deciding vote to advance Kevin Warsh’s nomination to the full Senate.

Lawmakers on the Senate Committee on Banking, Housing and Urban Affairs voted 13-11 along party lines to move Warsh to the next step.

The potential turnover at the top of the Fed, which sets monetary policy, comes as Americans see higher costs hit their pocketbooks, particularly soaring prices at the gas pump, as the U.S.-Iran conflict disrupts worldwide energy supplies.

Tillis had withheld his support until the Trump administration announced Friday it would drop what the senator described as a “bogus” investigation of current Fed Chair Jerome Powell.

“It’s no secret that the reason that Mr. Warsh’s nomination could have been held up is because of my concern with the investigation. I want to thank the Department of Justice for the assurances that they gave me,” Tillis, R-N.C., said following the panel’s brief morning session that lasted just under 15 minutes.

“The fact of the matter is, this was based on two minutes of testimony. It was not criminal,” Tillis said of the DOJ’s probe into Powell’s June 2025 testimony to Congress on a major $2.5 billion renovation of the Fed’s Washington, D.C., headquarters.

The committee vote comes after Trump’s sustained verbal attacks on Powell over several months, including numerous public threats to fire the Fed leader if he did not agree to lower interest rates. `

A federal judge last month blocked the administration’s subpoenas to probe the Fed and Powell, citing “a mountain of evidence” that Trump was using the investigation to force Powell’s hand.

The Fed was scheduled to meet Wednesday afternoon to deliver its latest decision on interest rates, possibly the last under Powell, whose term expires May 15.

Inflation, affordability

The committee’s top Democrat, Sen. Elizabeth Warren of Massachusetts, said the vote brings Trump “one step closer to completing his illegal attempt to seize control of the Fed and to artificially juice the economy.” 

Inflation and affordability are emerging as major issues ahead of the 2026 midterm elections that will determine control of Congress. 

Sen. Raphael Warnock, D-Ga., said his constituents in Georgia and beyond “deserve to know that the Fed is on their side, maximizing their chances to keep a good paying job and keeping their lives affordable, not on the side of the president’s poll numbers or his political concerns as we approach the midterm.”

“Fed independence is not theoretical. It matters to the everyday lives of working families,” Warnock said.

According to a Reuters/Ipsos poll taken between April 24-27, 61% of Americans think the U.S. economy is on the wrong track. 

When asked about the costs and benefits of the war in Iran, only a quarter of respondents said they agreed the U.S. military operation was worth it, according to the Ipsos poll.

Americans have watched fuel prices climb in March and April after Iran retaliated against the U.S.-Israeli attacks by choking off the Strait of Hormuz, a narrow maritime passageway where, prior to the war, one-fifth of the world’s petroleum passed.

Gas prices climb

The average price across the U.S. for a gallon of regular gas reached $4.23 Wednesday, not only the highest price point since the U.S. launched operations in Iran on Feb. 28, but also the highest since July 2022, according to GasBuddy.  

Prior to the war, a gallon of regular hadn’t topped $3 all year.

A return to normal, free flow in the strait — which was about 140 vessels per day pre-war — appears out of reach at the moment, as Trump announced last weekend his negotiators pulled back again on attending talks in Islamabad.

Secretary of Defense Pete Hegseth sidestepped a question Wednesday regarding how much longer the war might last, asked by Rep. Chrissy Houlahan, D-Pa., before the House Armed Services Committee.

During the same hearing however, the Pentagon’s Jules Hurst III, acting undersecretary of war who oversees finances, did reveal the war had so far cost the U.S. $25 billion.

While the Fed’s inflation target is 2%, data released at the beginning of April showed prices for all items rose 3.3% over a year ago. The jump was largely driven by a 21% spike in fuel prices from February to March.

The Fed’s so-called “dual mandate” is to maximize employment and stabilize prices. The Fed primarily loosens or tightens the economy by adjusting interest rates — lowering them if the economy lags and inflation is too low, and raising them when inflation becomes too high.

Lisa Cook firing

Warren and Warnock also noted Trump’s ousting in August of Fed Governor Lisa Cook, appointed to the board by former President Joe Biden. The U.S. Supreme Court is reviewing whether Trump exceeded his authority in firing Cook.

Warnock said he was dissatisfied with Warsh’s written responses to additional questions sent after his April 21 nomination hearing before the committee.

“I asked, quote: ‘If President Trump, or any future president, attempts to unlawfully fire you without cause, would you leave the Federal Reserve?’ His response, quote: ‘I will not answer hypothetical questions of this nature,’” Warnock recounted.

“Well, this isn’t a hypothetical question. In fact, the president attempted to fire Governor Cook this in the past year, and the president has repeatedly mused about firing Chair Powell because he won’t bend to his interest rate demands — doing so as recently as two weeks ago,” Warnock said, referring to Trump’s comments during an April 15 Fox Business interview. 

Asked Wednesday afternoon if he thinks Warsh will persuade the Fed’s board of governors to lower interest rates, Trump told reporters, “They should because it’s a good time to lower them. We’re the most prime country anywhere in the world.”

Powell also faced questions Wednesday afternoon.

When asked whether he expects Warsh will remain independent of Trump, Powell said, “He testified very strongly to that effect in his hearing, and I’ll take him at his word.”

Jennifer Shutt contributed to this report.

WASHINGTON — President Donald Trump’s pick to lead the Federal Reserve, Kevin Warsh, vowed Tuesday the central bank would remain “strictly independent” if he’s confirmed to the top spot, even as the president has broadcast his demand for the new Fed chair to lower interest rates.

Warsh, a former Fed board governor, faced questions during his confirmation hearing before the U.S. Senate Committee on Banking, Housing and Urban Affairs, as the clock winds down on the term of current Fed Chair Jerome Powell, who is in Trump’s crosshairs.

Trump’s criminal probe into Powell, over a $2.5 billion renovation project at the Fed’s offices, stands in the way of Warsh’s confirmation on the closely divided committee. 

Sen. Thom Tillis, R-N.C., maintains he will vote against Warsh’s nomination until Trump directs federal prosecutors to halt their “bogus” investigation into one of his most high-profile political foes.

The Senate Banking Committee is made up of 13 Republicans in the majority, and 11 Democrats in the minority. All Democrats plan to oppose the nomination, and with Tillis, a tied vote means Warsh’s nomination would not advance to the full Senate.

The committee’s top Democrat, Sen. Elizabeth Warren of Massachusetts, alleged Trump wants to install a “sock puppet” and “use monetary policies to artificially juice the economy in the short term, and this is his last chance to do that before the November elections.”

Instead of questioning Warsh, Tillis displayed a series of images and figures illustrating the “unfortunate, but legitimate” cost overruns at the Federal Reserve’s Washington, D.C., headquarters. 

“If we put everybody in prison in federal government that had had a budget go over, we’d have to reserve an area roughly the size of Texas for a penal colony,” Tillis said. “… Let’s get rid of this investigation so that I can support your nomination.”

Court action

U.S. District Court Judge James Boasberg, for the District of Columbia, last month blocked the administration’s subpoenas to probe the central bank and Powell, pointing to “a mountain of evidence” that Trump is using the investigation to force Powell to lower interest rates, or resign.

Still, the president has not backed down. One week before Tuesday’s hearing, two investigators from the office of Jeanine Pirro, U.S. attorney for the District of Columbia, showed up unannounced at the Fed’s construction site, according to details reported by the New York Times.

On more than 100 occasions, according to Boasberg’s order, Trump and his allies have made public statements ridiculing Powell and threatening to fire him if interest rates were not lowered.

Powell’s term expires May 15. During a recent press conference, Powell said he plans to stay on, as permitted by Fed regulations, as chair pro tempore until his successor is confirmed.

If Powell stays on, “well then, I’ll have to fire him,” Trump told Fox Business host Maria Bartiromo on April 15. 

A ‘battle-tested’ pick

While Trump’s clash with Powell overshadowed Warsh’s nomination hearing, Republicans largely praised the former board governor, who served from 2006 to 2011.

Senate Banking Chair Tim Scott, R-S.C., said Warsh is “battle-tested” after helping to steer the central bank during the 2008 financial crisis.

“During his first term as governor, he helped our economy through the crisis and restored faith in the economy,”Scott said.

But Democrats questioned Warsh’s ability to remain independent of Trump’s demands, particularly as the president must justify higher costs from tariffs and the Iran war ahead of the 2026 midterm elections, when voters are expected to focus heavily on affordability issues.

Sen. Andy Kim, D-N.J., asked Warsh, “Do you agree that the American families are struggling right now with affordability?”

Largely laying the blame on post-COVID-19 monetary policy decisions under President Joe Biden, Warsh said the Fed bears “some responsibility for the things that you’ve described, and that the legacy of inflation, what I think is the biggest economic policy error in 40 or 50 years, happened just a few years ago, and we’re still living with the with the remnants of it. I think inflation is less problematic than it was a couple of years ago.”

When Kim pressed whether the Fed should be concerned about spiking fuel and fertilizer costs amid Trump’s continuing war in Iran, Warsh said, “Senator, if my reform agenda, if confirmed, stands for anything, it’s for the central bank, especially the Fed chairman, to stay in its lane.”

Lisa Cook firing

Warren and Sen. Angela Alsobrooks, D-Md., also invoked Trump’s contested August 2025 firing of Federal Reserve Board Governor Lisa Cook, currently under review in the U.S. Supreme Court. 

The high court’s oral arguments in January drew a high-profile appearance from Powell. Trump alleged Cook committed financial fraud, but even conservative Supreme Court justices questioned his argument for her firing.

“Will you commit to defending Governor Cook’s tenure as Chairman Powell has done?” Alsobrooks asked.

“Senator, it was a pleasure to meet you in your office, and spend time with you. As I said to you then, I’ll repeat here to the broader committee: If I stand for anything, it’s the Fed should stay in its lane. As I understand that matter, it’s pending before the United States Supreme Court,” Warsh said.

In his opening statement, Warsh defended a president’s right to share opinions on interest rates but told Democratic lawmakers multiple times Tuesday that Trump has not asked him for a commitment.

Following up on an answer Warsh provided earlier during the hearing, Alsobrooks asked, “You said he never — ‘specifically’ is the word you used — demanded that you decrease interest rates. Well, did the president generally suggest this to you as well?”

“I wasn’t trying to be clever. The president never generally or specifically instructed me, or suggested I should commit to any interest rate path whatsoever,” Warsh said.