By Ashley Murray | D.C. BureauWASHINGTON — 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.
