North Carolina Republican Sen. Thom Tillis told NBC’s “Meet the Press” on Sunday that he no longer plans to oppose President Trump’s nomination of Kevin Warsh to replace Federal Reserve Chair Jerome Powell now that the DOJ has dropped its investigation into Powell. He suggested that allowing President Trump to create the appearance of using a DOJ investigation to intimidate, pressure, or force Powell to resign could have undermined the institution’s global credibility and had “devastating” consequences for U.S. financial markets. “We can move on and let the Fed be independent,” Tillis said. “Thank God we avoided that.” Tillis said he thinks Warsh can credibly serve independently of the White House, saying, “As a matter of fact, I wouldn’t be surprised if the president doesn’t get annoyed with him.” Trump appointed Powell in November 2017 and didn’t start referring to him as “too slow” to lower interest rates until years later. “Kevin’s going to go in there with a great reputation, past experience, relationships with prior Fed chair boards,” Tillis said about Warsh. “He’s going to understand he’s got to work on gaining consensus.” “You know, the president’s right to just press and press and press. I don’t begrudge him for demanding that inflation goes down,” Tillis also said. “We’ve got to deal with the affordability problem, and this president’s trying to do it better than Biden and Obama ever did.” “But you’ve got to do it by the rules, and you’ve got to do it within the bounds of the institution so that we maintain this precious, exceptional gift that we have as a nation and the gold standard for a financial system,” he said.

KRISTEN WELKER, NBC NEWS: The Department of Justice on Friday announced it was going to close its investigation into Federal Reserve Chair Jerome Powell. You had pledged to block the confirmation of Powell’s successor, Kevin Warsh, until the investigation was dropped… So let me ask you, will you now vote yes to confirm Kevin Warsh? SEN. THOM TILLIS: Well, let me back up. And the announcement on Friday was well received by me. I think it’s the first time that the Department of Justice in D.C. or I should say the D.C. prosecutors have acknowledged that they’re not going to carry this case forward. The case is on appeal. But after that statement, I’ve had a number of discussions with the Department of Justice. They have made it very clear that the current investigation is completely and fully ended. There may be some confusion because they’re moving forward with the appeal, but I have been assured by the Department of Justice that that appeal is simply to challenge the basis for judging on the motion to quash the subpoenas. It would not in any way constitute a basis for reopening the investigation. And we heard from Acting Attorney General Blanche just a few minutes ago that the only thing that would trigger an investigation is criminal, potential criminal misconduct identified by the Inspector General Horowitz, who’s one of the most respected inspector generals in Washington or in the whole of government. I believe – I have studied this and I believe that there will not be any wrongdoing. Maybe we find a little stupid here in terms of somebody responsible for the project making a decision they shouldn’t? Maybe. But it doesn’t rise to a criminal prosecution. That was my problem to begin with, because I feel like there were prosecutors in D.C. that thought this was going to be a lever to have Mr. Powell leave early. But now with this I am prepared and with the assurances from the Department of Justice that the case is completely and fully settled, that the appeal would only be used to potentially abrogate or change the ruling for administrative purposes, not as a basis for reopening the investigation, and that the only way an investigation would be open would be a criminal referral from one of the most respected inspector generals there, I am prepared to move on with the confirmation of Mr. Warsh. I think he’s going to be a great Fed chair. KRISTEN WELKER: I just want to put a fine point on it, because what you’re saying is significant, Senator. You are now a yes to vote on the confirmation of Kevin Warsh? SEN. THOM TILLIS: That’s right. We’ll be putting out a statement. We worked a lot over the weekend to make sure that we were very clear that we had the assurances from the DOJ that I needed to feel like 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. And that’s the absurdity of this whole thing. If this investigation, which is now closed, had never occurred, we wouldn’t be having this discussion. He would have been confirmed by May the 15th. Fortunately, –by May the 15th. I think we’ll get there. And then Mr. Powell will have to make his own decisions at some point in the future about when, when and if he leaves the board before the end of his 28 term expiration. You know, I suspect Mr. Powell wants to see what happens with the appeal and to make sure that it is fully settled after the appeal. It could be a lengthy process. Hopefully not. And then we can move on and let the Fed be independent, because if we had allowed this to occur, I think it would have had devastating consequences for our financial systems and the markets worldwide. Thank God we avoided that. KRISTEN WELKER: Just to be clear, are you confident that Kevin Warsh will act independently of the president if he is in fact confirmed? SEN. THOM TILLIS: Yeah. As a matter of fact, I wouldn’t be surprised if the president doesn’t get annoyed with him once or twice. Look, the Fed body that determines rate hikes, that works on their dual mandate for employment and for inflation, it’s a consensus-building body. You have 12 voting members. No one person can actually control it. You have to get a majority of it – and ideally you get a supermajority. So Kevin’s going to go in there with a great reputation, with past experience, with relationships with I think as many as five prior Fed chair boards. He’s going to understand he’s got to work on gaining consensus. You know, the president’s right to just press, and press and press. I don’t begrudge him for demanding that inflation goes down. We’ve got to deal with the affordability problem, and this president’s trying to do it better than Biden and Obama ever did. But you’ve got to do it by the rules, and you’ve got to do it within the bounds of the institution so that we maintain this precious, exceptional gift that we have as a nation and the gold standard for a financial system.

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