Powell's term ends in mid-May, and there is now a clear path to who replaces him.
Sen. Thom Tillis (R-N.C.) said Sunday he is done blocking Kevin Warsh's confirmation as the next Fed chair, ending a hold that hinged on a Justice Department investigation into Powell. The DOJ ended that probe Friday.
Tillis was the swing vote on the Banking Committee, and without him Warsh's path looked stuck. Now the path is wide open.
Tillis went on NBC's "Meet the Press" Sunday and said he had assurances from the DOJ that the case against Powell is "completely and fully ended." His worry was that the DOJ was using the Powell case to lean on Fed independence.
The investigation, focused on cost overruns at the Fed's headquarters renovation, has been handed to the Fed's inspector general. Acting Attorney General Todd Blanche said on the same show the IG could refer the case back if it finds criminal conduct, but that is a different bar.
The Banking Committee is 13 Republicans and 11 Democrats, and Tillis was the only Republican holdout. With his yes, Warsh advances, and the full Senate vote follows soon after.
Warsh told senators at his hearing Tuesday that he wants "regime change" at the Fed, including changes to how the central bank measures inflation and how it talks to markets.
He is also expected to push hard for rate cuts. The catch: Warsh has to convince the rest of the Federal Open Market Committee, the group that sets rates.
Energy prices are climbing because of the Iran war, and many FOMC members are likely to push back on cuts in that setup.
Powell can stay on the Fed board as a voting member through January 2028 even after stepping down as chair, and he has said he plans to.
That sets up an unusual dynamic at the central bank, with a former chair voting under a new chair who has openly called for a rebuild.
The Fed's next press conference is Wednesday, and Powell will likely get questions about whether he is actually staying. He will also probably get asked whether he and the new chair can run a Fed in the same room.
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