The Federal Reserve released the minutes from its April 28-29 policy meeting. The document reveals a majority of officials support potential rate hikes. This stance applies if inflation remains persistently high. The revelation signals a more hawkish monetary policy approach than markets previously anticipated. Price stability remains the central bank’s primary concern amid ongoing economic uncertainty.

The minutes show officials discussed raising interest rates as a tool. They view this option as necessary if inflation stays above target. The Federal Reserve holds its current policy rate in the 3.50%-3.75% range. Officials expressed willingness to move rates higher if economic conditions warrant. This represents a significant shift in the central bank’s policy communication strategy.

The timing of this revelation carries substantial weight. Kevin Warsh is becoming Fed chair during this critical period. The fallout from the Iran war stokes quicker price increases ahead of his leadership. Jerome Powell served as the then-Fed chair during the April meeting. The transition occurs as inflation concerns intensify across economic sectors.

Officials emphasized their commitment to the 2% inflation target. They stated readiness to act if prices continue rising. The minutes document robust debate about appropriate policy responses. Most participants agreed that maintaining credibility requires action. The Fed cannot allow inflation expectations to become unanchored.

Market Reaction Shows Heightened Rate Hike Expectations

Financial markets responded swiftly to the minutes release. Prediction markets now show a 31.5% probability of a rate hike in 2026. This figure represents an increase from 28% just one week earlier. The shift demonstrates how traders interpret the Fed’s hawkish tone. Market participants repriced their expectations for future monetary policy moves.

The probability of a rate cut by June 2026 dropped sharply. Markets now assign only 1.2% odds to that scenario. This dramatic decline reflects reduced expectations for monetary easing. Traders shifted the yield curve dynamics as they repriced Fed expectations. The bond market showed immediate sensitivity to the policy signals.

Investment strategists view the minutes as moderately to highly impactful. The document confirms what many suspected about Fed thinking. Officials maintain a data-dependent approach to policy decisions. However, they clearly lean toward tightening if inflation persists. This stance influences everything from mortgage rates to corporate borrowing costs.

The hawkish tone surprised some market observers. Many analysts had expected more dovish language from the central bank. Instead, officials demonstrated resolve in fighting inflation. The minutes reveal broad consensus among committee members. This unity strengthens the credibility of potential policy actions.

Economic Backdrop Complicates Policy Decisions

The leadership change coincides with critical economic junctures. Inflation remains above target levels across multiple measures. Growth shows signs of resilience despite higher interest rates. The labor market maintains strength with low unemployment. These factors complicate policy calibration efforts for Fed officials.

Central bankers face a delicate balancing act. They must control inflation without triggering recession. The minutes show deep debate about appropriate policy responses. Officials weighed risks of acting too quickly versus moving too slowly. Both scenarios carry substantial economic consequences for American households and businesses.

The Iran war fallout adds complexity to inflation dynamics. Energy prices face upward pressure from geopolitical tensions. Supply chain disruptions continue affecting goods prices. Food costs remain elevated in many categories. These factors make the Fed’s 2% target more challenging to achieve.

Committee members discussed various economic scenarios during the meeting. They analyzed potential paths for inflation over coming months. Officials examined labor market data for signs of cooling. Wage growth patterns received particular scrutiny from policymakers. Any acceleration in wages could prompt faster action.

Key Indicators Will Guide Future Policy Actions

Observers should monitor upcoming economic data releases closely. Inflation and employment figures will likely influence Fed decisions. The Consumer Price Index reports carry heightened importance now. Core inflation measures excluding food and energy receive special attention. These metrics help officials gauge underlying price pressures in the economy.

Jerome Powell and other Federal Reserve officials may provide further guidance soon. Their speeches and public statements shape market expectations. The next FOMC meeting will be crucial for policy direction. Any shifts in economic forecasts from major financial institutions could impact outlooks.

Market participants watch for signals about the policy trajectory. The minutes suggest officials remain flexible in their approach. They commit to adjusting policy as conditions evolve. This adaptive stance allows the Fed to respond to changing economic realities. Data dependency remains the cornerstone of their decision-making framework.

The central bank’s communication strategy gains importance during this period. Officials must balance transparency with avoiding market disruption. Clear guidance helps businesses and households plan effectively. However, the Fed maintains optionality to change course if needed. This flexibility proves essential in uncertain economic environments.

Policy Path Remains Uncertain Despite Hawkish Tone

The minutes reveal openness to rate hikes but guarantee nothing. Actual policy moves depend on evolving economic conditions. Officials emphasized their commitment to data-driven decisions throughout the document. The Fed maintains readiness to act in either direction. Flexibility remains paramount as economic uncertainty persists across global markets.

Financial institutions adjust their forecasts based on these revelations. Many now anticipate a longer period of restrictive policy. Some analysts predict rates could move higher than previously expected. Others caution that economic softening might still prompt cuts. The divergence in forecasts reflects genuine uncertainty about the path ahead.

The implications extend beyond monetary policy to broader economic activity. Higher rates affect consumer spending patterns and business investment. Housing markets feel pressure from elevated mortgage costs. Corporate borrowing becomes more expensive at higher rates. These ripple effects touch every corner of the economy.

The Fed’s stance influences global central bank decisions as well. International monetary authorities watch U.S. policy moves closely. Coordination among major central banks helps manage capital flows. Currency markets respond to diverging policy paths across countries. The global nature of inflation requires international cooperation in some respects.

Looking ahead, the Federal Reserve faces critical choices. Officials must weigh competing economic priorities carefully. The minutes demonstrate their awareness of these trade-offs. They show commitment to achieving price stability over time. Whether rate hikes materialize depends on incoming economic data and evolving conditions.

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Kevin Warsh will be sworn in as the 17th Federal Reserve Chair this Friday. President Donald Trump will personally attend the White House ceremony. The event marks a significant departure from recent Federal Reserve protocol. This high-profile installation signals a new era for central bank leadership. The ceremony breaks decades of tradition for Fed chair inaugurations.

Historical records show the last White House Fed chair swearing-in occurred in 1987. Alan Greenspan received that honor under different circumstances. The last presidential attendance at such a ceremony happened in 2006. George W. Bush attended Ben Bernanke’s inauguration that year. Jerome Powell held an internal Fed ceremony in 2018. Trump notably did not attend Powell’s swearing-in.

The White House breaks long-standing Fed independence norms with this high-profile ceremony. Market observers will scrutinize the event for signals about future monetary policy. Warsh’s reputation as the wealthiest Fed Chair in history adds another layer of interest. The administration’s strong personal endorsement appears unmistakable. Questions about central bank independence will likely intensify.

Balance Sheet Reduction Takes Center Stage

Warsh recently appeared before the Senate Banking Committee to outline his policy vision. His monetary policy framework centers on “balance sheet reduction and rate cut” strategies. The new chair aims to lead the Federal Reserve toward traditional monetary standards. He opposes making quantitative easing a normalized policy tool. QE should remain reserved for extreme zero-bound scenarios.

The incoming Fed Chair argues balance sheet expansion primarily inflates financial asset prices. Asset holders benefit disproportionately from such policies. The general public sees minimal advantages from quantitative easing programs. Warsh believes QE creates distortions in asset valuations. He advocates strongly for quantitative tightening to address these imbalances. Balance sheet reduction removes excess liquidity from financial markets.

His quantitative tightening advocacy represents a hawkish stance on monetary conditions. The new chair views QT as a substitute for interest rate hikes. This approach aims to tighten overall liquidity without raising borrowing costs. The strategy signals a less accommodative Federal Reserve under new leadership. Market participants must prepare for shifting policy dynamics. The balance sheet debate will dominate early Warsh Fed discussions.

Inflation Pressures Constrain Rate Cut Ambitions

Warsh enters office facing significant upside inflation risks. Trump promised falling prices from his presidency’s start. Economic data tells a different story about price trends. Import tariffs continue exerting upward pressure on consumer costs. Energy prices spiked during recent Middle East conflicts. Strong investment and spending patterns fuel continued inflationary momentum.

The inflation backdrop creates immediate policy dilemmas for Warsh. His preference for rate cuts conflicts with inflation-fighting priorities. Several Fed governors have expressed concern about building price pressures. Powell’s tenure saw higher average inflation than previous chairs. A developing “disinflation” trend recently reversed course. Twin shocks from tariffs and energy costs changed the trajectory.

Inflation moves further above the Fed’s 2% target. The new chair must establish anti-inflation credibility immediately. Investors currently expect Warsh may need to raise rates as soon as January. This possibility contradicts both Trump’s preferences and Warsh’s rate-cut inclinations. The Federal Reserve’s collective decision-making process constrains individual chair preferences. Hawkish outlook from other Fed officials limits policy flexibility.

Employment Picture Complicates Policy Calculus

The Federal Reserve operates under a dual mandate framework. Controlling inflation represents one critical mission. Maintaining strong employment constitutes the second equally important goal. These objectives sometimes create policy conflicts. Rising prices may require tighter policy that risks job growth. High unemployment could demand lower rates risking economic overheating.

The Fed currently evaluates whether such tension exists now. The unemployment rate has remained relatively steady recently. By historical standards, current joblessness levels appear manageable. Some advocates argue the labor market shows hidden weakness. Real risks of fast-rising unemployment concern certain policymakers. Lately, officials have expressed more worry about employment dynamics.

Warsh must navigate balancing inflation control with employment protection. The transition from Powell creates additional complexity. Powell remains a Fed governor during this leadership change. The departing chair continues as temporary central bank leader until Warsh’s swearing-in. The transition period allows institutional knowledge transfer. Powell’s continued presence provides continuity. Leadership change happens during this delicate period.

New Era for Trump and Federal Reserve Relations

The relationship between Trump and the Federal Reserve enters uncharted territory. The president spent years criticizing Powell as his favorite punching bag. Eight years of friction characterized previous White House-Fed interactions. A global pandemic complicated monetary policy during that period. The fight against high inflation dominated recent Fed actions.

Trump initially berates Powell just months into his first term. The president grew annoyed at Fed interest-rate hikes in 2016. Now Trump demands rate cuts from monetary authorities. Warsh may disappoint presidential expectations due to inflation risks. The hawkish outlook of other Fed officials creates additional constraints. Political pressure meets economic reality in monetary policy formation.

Warsh presumably brings a fresh start to Oval Office-central bank relations. The new chair faces immediate tests of Fed independence. His wealthy background and White House endorsement raise questions. Market scrutiny regarding future monetary policy autonomy will intensify. The rare White House ceremony symbolizes closer political-monetary ties. Observers will watch carefully for signs of compromised independence.

Immediate Challenges Define Early Warsh Tenure

The incoming Fed Chair confronts multiple simultaneous policy pressures. Establishing credibility on inflation control tops the priority list. Quantitative tightening serves as his preferred additional tightening tool. This approach allows rate cuts while still removing monetary accommodation. The delicate balance requires skillful policy execution. Collective Fed decision-making limits individual chair authority.

Short-term policy pivots face significant constraints from institutional processes. The transition from Powell requires careful management. Market expectations already price in potential rate increases. Political pressure for rate cuts conflicts with economic fundamentals. Warsh must demonstrate independence while maintaining productive White House relations. The coming months will test his leadership capabilities and policy convictions.

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The Federal Reserve held interest rates steady on Wednesday. The decision came at what many expect to be Chair Jerome Powell’s final policy meeting. Markets had already priced in a 100% chance the Fed would stay on hold. Attention instead turned squarely to Powell and the bank’s looming leadership transition.

Powell held a press conference at 2:30 p.m. EDT on Wednesday, April 29. His term as Fed chair ends on May 15. The Senate Banking Committee also voted Wednesday morning on whether to confirm his successor. President Trump nominated Kevin Warsh to replace Powell at the helm of the world’s most influential central bank.

The committee advanced Warsh’s nomination to the full Senate for final confirmation. Last week, the Justice Department closed a criminal investigation into Powell and the central bank. That decision cleared a significant political path for Warsh’s confirmation to proceed. Analysts widely expect the full Senate to confirm him.

Powell’s Future at the Fed Remains Unclear

Powell’s departure is not entirely straightforward. He serves simultaneously as chair and as a governor on the Fed’s board. His term as chair ends next month, but his term as a governor runs until January 2028. He has not yet indicated publicly whether he will stay on in that reduced role.

Chairs typically leave the board when their leadership terms end. Powell has signalled he could remain, which would be the first time a former chair stayed on the board since 1948. Protecting Fed independence has been a cornerstone of Powell’s tenure. Staying on would deny Trump the chance to appoint yet another board member.

Three of the Fed’s seven current governors are already Trump appointees. If Powell stays, he would keep that balance from shifting further. However, his presence could worsen tensions with the Trump administration. Some analysts call this a potential “two Popes” scenario, with both a sitting chair and a former chair on the board.

That dynamic could create deeper divisions among policymakers. At the same time, experts note it might not dramatically alter the trajectory of interest rates. Powell has generally supported reducing rates when conditions allow. He would likely back further cuts once inflationary pressures ease sufficiently.

War and Inflation Cloud the Economic Outlook

The Fed’s rate-setting committee met against a backdrop of serious economic uncertainty. The United States and Israel launched the war against Iran, sending shockwaves through global energy markets. The price of U.S. crude oil has surged almost 70% so far this year as a direct result. Airlines cut thousands of flights worldwide as jet fuel prices spiked sharply.

In March, overall inflation jumped 0.9% from February. That pushed the annual rate above 3.3%. The Fed has now remained above its 2% inflation target for five years. The labor market has remained resilient but not without signs of strain.

KPMG chief economist Diane Swonk highlighted the complexity facing policymakers. She wrote that the war, tariff uncertainty, and AI’s potential economic impact all cloud the Fed’s outlook. Deutsche Bank economists predicted the conflict would dominate Powell’s press conference. They expected Powell to emphasise that officials remain unsure of the war’s precise economic fallout.

The combination of elevated energy costs and sticky core inflation leaves policymakers in a difficult position. Cutting rates now would risk inflaming price pressures further. Roger Ferguson, a former Fed vice chair, told CNBC the central bank faces a tough balancing act. He argued officials should “sit tight for a little while” to see how events unfold.

Markets Focus on Powell’s Words, Not Just the Rate Decision

With the rate decision itself generating little suspense, all eyes fell on Powell’s press conference. Goldman Sachs economist David Mericle expected the post-meeting statement to acknowledge better labor market news. He also expected it to flag higher inflation numbers while leaving policy guidance unchanged. Mericle predicted a strong consensus to hold, with only one dissent, matching the March outcome.

Citigroup’s chief U.S. economist, Andrew Hollenhorst, noted the broader context on Monday. He said the presumed transition to Warsh’s leadership made Wednesday’s meeting less important for markets. He added there would be no update to economic projections. Policy rates were widely expected to remain unchanged.

Former senior Fed analyst Jerry Tempelman offered a candid assessment. He said that if Powell were staying on, markets would search carefully between the lines of his remarks. Given Warsh’s likely imminent takeover, Tempelman argued that Powell’s surrounding language becomes less relevant to future policy signals. Wednesday’s press conference looked more like a valedictory address than a policy roadmap.

A Contentious Era Draws to a Close

Powell’s tenure ranks among the most turbulent in the Fed’s modern history. He navigated the central bank through the pandemic, a historic inflation surge, and an aggressive rate-hiking cycle. He also endured a deeply contentious relationship with the Trump administration. Few Fed chairs have faced that level of political pressure from the White House.

From a communications standpoint, analysts expect the Fed to keep its focus firmly on inflation. Core inflation, excluding food and energy, recently ran at 3%. That remains well above the Fed’s long-term 2% target. Policymakers have made clear they need more progress before considering rate cuts.

Wednesday marks a turning point for the Fed, regardless of whether Powell departs cleanly or stays on as a governor. The Fed is set to enter a new chapter under Warsh’s leadership, facing substantial economic challenges. Those challenges include elevated inflation, war-driven energy costs, and persistent trade uncertainty. The path ahead for America’s central bank remains anything but straightforward.

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Kevin Warsh took a major step toward leading the Federal Reserve on Tuesday. He appeared before the Senate Banking Committee for his confirmation hearing. Warsh is President Donald Trump’s nominee to replace Jerome Powell as Fed chair. The hearing opened against a backdrop of political tension and economic uncertainty.

Warsh’s appearance before the Senate Banking Committee marks a major step in his decade-long pursuit of the top central bank job. The role he may eventually assume could look vastly different from what he anticipated. Inflation is worsening, the war in Iran has driven up gas prices, and Trump demands aggressive rate cuts. Those pressures cloud what lies ahead for the next Fed chair.

Warsh released written remarks on Monday ahead of the hearing. He called the Federal Reserve’s political independence “essential.” However, he also suggested that independence did not face serious threats. Critics viewed that framing as an attempt to satisfy both Trump and skeptical senators simultaneously.

The Central Question: Will Warsh Stand Up to Trump?

Senators, Wall Street analysts, and White House officials all share one pressing question. They want to know whether Warsh will bow to presidential pressure on interest rates. Trump has repeatedly demanded steep cuts to the Fed’s short-term borrowing rate. He also repeatedly threatened to fire outgoing Chair Jerome Powell for resisting those demands.

A former Senate Banking Committee staffer framed the core issue bluntly. “The key question would be: ‘If he tries to fire you, are you leaving?'” the staffer said. The staffer added that Powell stood up to direct attacks from Trump. Senators want to know whether Warsh would do the same.

Sen. Mike Rounds, a Republican from South Dakota and a senior Banking Committee member, acknowledged the central theme. “Both Republicans and Democrats will probably have good, real questions for him,” Rounds told reporters. He confirmed that Fed independence would dominate the session. Warsh must convince two very different audiences at once.

Warsh faces the challenge of reassuring senators about central bank independence. At the same time, he must avoid publicly antagonising Trump. Those two goals sit in direct conflict. His performance on Tuesday could determine whether his confirmation succeeds.

A Hawk Who Changed His Tune on Rates

Warsh previously served on the Fed’s board of governors. During that tenure, analysts described him as “hawkish” on monetary policy. That label meant he was cautious about cutting interest rates. He feared that aggressive cuts could allow inflation to spiral out of control.

More recently, Warsh shifted his position significantly. He now argues that productivity gains from artificial intelligence could allow the Fed to cut rates safely. He contends that AI-driven growth would keep prices in check even with lower borrowing costs. Critics call that shift a suspicious change of heart.

Sen. Elizabeth Warren, the ranking Democrat on the Banking Committee, attacked that reversal directly. She argued that Warsh’s change of position signals a willingness to follow Trump’s instructions on rates. Warren told NPR that Warsh had gone out of his way to signal compliance with the White House on monetary policy. Most other Fed officials currently support holding rates steady, as inflation has started rising again.

Senator Tillis Threatens to Block the Vote

Warsh faces a serious obstacle that has nothing to do with his own record or qualifications. Sen. Thom Tillis, a Republican from North Carolina, has promised to block a confirmation vote. Tillis sits on the Banking Committee and holds significant procedural power. His objection centres on a Justice Department investigation into the Fed.

The DOJ launched a criminal investigation into the Fed’s headquarters renovation project. The probe ostensibly targets cost overruns on that construction work. Powell has argued publicly that the investigation represents a political pressure campaign. A federal judge agreed, describing the investigation as an unjustified act of intimidation.

Tillis wants the Justice Department to drop the investigation entirely before he supports Warsh’s confirmation. The DOJ has said it will appeal the judge’s ruling. The standoff could stall Warsh’s confirmation, even if the hearing goes well. Dropping the probe would win Tillis’s vote, but the administration has not yet taken that step.

The Supreme Court also looms over the entire process. The court is currently considering how much authority the president holds to fire Fed board members for alleged misconduct. That ruling could reshape the boundaries of Fed independence permanently. The outcome will affect the very job Warsh hopes to fill.

Financial Disclosures Draw Democratic Scrutiny

Democrats on the committee have drawn attention to Warsh’s financial holdings ahead of the hearing. Warsh is a wealthy investor, and his total financial holdings exceed $100 million according to a recent disclosure. Democrats argue his vast portfolio raises transparency concerns. They plan to press him on those holdings during Tuesday’s session.

Warsh is a former top Fed official as well as a successful private investor. His financial background gives him deep knowledge of markets and monetary policy. However, critics argue that his extensive investments could create conflicts of interest. The committee will scrutinise how he plans to manage those potential conflicts.

An Unprecedented Situation Awaits If Confirmed

Warsh would inherit a far more difficult economic environment than he might have anticipated. The war in Iran has driven up gas prices sharply, and inflation is worsening as a result. Those conditions make the aggressive interest rate cuts Trump demands significantly harder to justify. The conflict also threatens to slow economic growth and weaken hiring.

If confirmed, Warsh could find himself in a historically unusual situation. Jerome Powell, the outgoing chair, would likely remain on the Fed’s governing board after leaving the top role. Working alongside a predecessor in that capacity has not occurred since the late 1940s. No modern template exists for navigating that kind of arrangement.

Warsh’s confirmation enjoys broad support among Senate Republicans. However, he is unlikely to attract many Democratic votes. The combination of financial scrutiny and political pressure makes his path unusually complex. This nomination has become a flashpoint for debates about presidential power and the future of monetary policy.

Warsh carries strong institutional credentials into Tuesday’s hearing. His prior service on the Fed board and his investment experience give him genuine expertise. Whether that expertise can survive the political pressures surrounding this nomination remains the defining question. The Senate Banking Committee hearing is only the beginning of that test.

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President Donald Trump has sharply escalated his conflict with Federal Reserve Chair Jerome Powell. Trump threatened to fire Powell if he does not vacate his position on time. The warning came during a Fox Business interview with Maria Bartiromo on Wednesday. Trump accused Powell of doing “a bad job” for refusing to cut interest rates.

The dispute between Trump and Powell has entered a new and dangerous phase. Trump told Fox Business he has long wanted to remove Powell from the role. “I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial,” Trump said. He added that if Powell stays beyond his term, he will act.

Powell’s term as Federal Reserve Chair expires on 15 May. However, Powell plans to remain in the role until his nominated successor wins Senate confirmation. Trump’s chosen replacement is Kevin Warsh. Warsh still awaits a confirmation hearing in the Senate.

Powell Vows to Stay Until Successor Is Confirmed

Powell has clearly stated his intention to stay on as acting chair if necessary. “That is what the law calls for,” Powell told reporters last month. He also holds a seat on the Fed’s governing board until 2028. Powell has said he will not resign until the Justice Department concludes its ongoing investigation.

That investigation centres on cost overruns at the Federal Reserve’s headquarters renovation project. Prosecutors have examined Powell’s statements to Congress about those renovation costs. Trump showed no willingness to drop the probe during the Fox Business interview. “Whether it’s incompetence, corruption, or both, I think you have to find out,” Trump said.

Three officials from the office of US Attorney for DC, Jeanine Pirro, made a surprise visit to the Fed renovation site on Tuesday morning. The officials were Carlton Davis, Steven Vandervelden, and Matthew Fox-Moles. The Wall Street Journal first reported the unannounced visit. POLITICO confirmed the visit through a source granted anonymity.

Federal Judge Questions True Purpose of DOJ Probe

A federal judge has already challenged the legitimacy of the Justice Department’s investigation. Judge James Boasberg ruled last month that cost overruns served as a mere pretext. He concluded the real purpose was to intimidate the central bank. Boasberg blocked the DOJ’s subpoenas as a result.

“The Government has offered no evidence whatsoever that Powell committed any crime other than displeasing the President,” Boasberg wrote. He added that the subpoenas aimed to “harass and pressure Powell either to yield to the President or to resign.” Despite this ruling, prosecutors have not stepped back from their pursuit. The continued investigation now threatens to delay Warsh’s confirmation significantly.

This confrontation carries enormous consequences for the Federal Reserve’s independence. The central bank sets monetary policy free from direct political interference, and this independence is a cornerstone of the US financial system. Trump’s repeated demands for lower interest rates have alarmed many economists. They warn that political pressure on the Fed undermines financial market stability.

Republican Senator Tillis Blocks Warsh Confirmation

Republican Senator Thom Tillis sits on the Senate Banking Committee. He has threatened to block Warsh’s confirmation entirely. Tillis shares concerns that the DOJ investigation is a political tool. He has said he will not vote to confirm Warsh unless prosecutors drop the Powell probe.

This stance creates a difficult dilemma for Trump. Dropping the investigation would allow Warsh’s confirmation to proceed quickly. But Trump made clear on Wednesday that he refuses to abandon the probe. The president told Fox Business: “Don’t you think we have to find out what happened there? I have to find out.”

Trump nevertheless expressed hope that Tillis would change his position. He described the senator as “an American… he knows what to do.” Trump appeared confident that political pressure would eventually bring Tillis around. However, Tillis has shown no immediate signs of softening his stance.

Senate Republicans Urge End to Powell Investigation

Several senior Republican senators have publicly urged the Justice Department to end its probe. Senate Majority Leader John Thune spoke clearly on the matter on Wednesday. “I think it’s in everybody’s best interest to wrap up the investigation,” Thune said. His comment signals growing unease within Republican ranks about the standoff.

Senator Mike Rounds also addressed the situation on Capitol Hill on Wednesday. He sits on the Senate Banking Committee alongside Tillis. Rounds told reporters the probe is not “serving our purpose, which is to help the president get the next Federal Reserve chairman he wants.” His remarks reflect frustration among Republicans eager to install Warsh quickly.

Treasury Secretary Scott Bessent struck an optimistic tone during a White House press briefing. He said he is “very optimistic” that Warsh will win confirmation before 15 May. Bessent pointed out that Tillis himself has praised Warsh as a strong candidate. “Let’s get to the hearings and see where we are,” Bessent said.

Legal Questions Surround Trump’s Authority to Fire Powell

Legal experts have raised serious doubts about Trump’s power to dismiss Powell. It remains unclear whether the president can fire a Fed chair without showing serious wrongdoing. The Supreme Court is currently weighing a related case involving the matter. Trump attempted to remove Fed board member Lisa Cook, and the high court allowed her to remain while the case continues.

Powell also retains the option to stay on the Fed’s governing board until 2028. That means even a dismissal as chair may not fully remove him from the institution. The legal and political battles surrounding the Federal Reserve now seem set to intensify. The outcome will likely shape US monetary policy for years ahead.

The core dispute remains Trump’s repeated demand for lower borrowing costs. Powell and the Federal Reserve have resisted those demands. Trump insists that high interest rates damage the US economy. The standoff shows no clear sign of resolution as Powell’s May deadline approaches.

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