Federal Reserve tested; Warsh hearing urged amid DOJ probe

Can Kevin Warsh hearings proceed during the Jerome Powell DOJ probe?

Treasury Secretary Scott Bessent has urged the Senate to begin confirmation hearings for Kevin Warsh even as the Justice Department’s probe into current Fed Chair Jerome Powell continues, as reported by Bloomberg. The question is less about legal prohibition than congressional timing and political will: Senate committees control their calendars, and the Banking Committee can notice and hold a hearing irrespective of an ongoing investigation.

Even so, advancing a nominee requires more than a hearing. Committee questioning, a potential markup, and eventual floor consideration all depend on leadership priorities and the absence of sustained objections, which could slow the process even if hearings begin promptly.

Why this matters for Federal Reserve independence and market confidence

Economists and business leaders have flagged risks that parallel hearings and a criminal probe could blur the line between policy disagreements and legal exposure, potentially politicizing monetary policy and undermining credibility, according to Business Insider. Perceptions of interference, real or perceived, can weigh on confidence in the rate‑setting process and complicate how markets interpret future communications from the Fed.

The debate is also being watched on Wall Street, where senior voices have emphasized protecting the central bank’s autonomy; MSN reported that JPMorgan’s Jamie Dimon underscored the importance of keeping Powell independent. That framing ties the Warsh timeline to broader institutional norms: the more the process appears insulated from politics, the steadier the backdrop for funding markets and risk assets may be.

In separating performance from criminality, Senator Tim Scott has been explicit about guardrails around oversight. “Ineptness is not a crime,” said Tim Scott, chair of the Senate Banking Committee, as reported by Fox Business.

At the time of this writing, Bitcoin (BTC) traded near 71,048 with very high 10.07% volatility, a 14‑day RSI around 35.75, and a bearish sentiment reading, based on provided market data. These figures indicate a fragile risk backdrop that could be sensitive to headlines about Fed leadership and institutional independence.

Immediate Senate dynamics and procedural paths for Warsh’s nomination

Path one is the straightforward route: notice a Banking Committee hearing, conduct questioning, and hold a committee vote to report the nomination, then seek floor time. MarketWatch reported that Tim Scott has expressed confidence the Powell probe will be resolved soon, which he believes would clear the way for Warsh’s confirmation; if that happens quickly, the committee could compress the calendar.

Path two is a staged approach: hold a hearing now to build a public record while deferring a committee vote until the investigation’s status is clearer. This could mitigate criticism that the process is either rushing ahead or unduly stalling, while preserving the committee’s leverage over timing.

A third path is to wait entirely for the DOJ probe to reach a defined milestone before any committee action. Bessent’s recommendation, by contrast, effectively tests whether the Senate will decouple the nomination process from the investigation without prejudging legal outcomes.

Positions of Tim Scott, Thom Tillis, and Elizabeth Warren

Tim Scott: Kitco reported that Scott argued Powell did not commit a crime, characterizing the controversy as a serious but non‑criminal lapse tied to preparation. He has also indicated that once the investigation’s status is clarified, the committee should be positioned to move Warsh’s nomination.

Thom Tillis: The Associated Press reported that Senator Thom Tillis has vowed to block any Federal Reserve nominee, including Warsh, until the DOJ resolves its investigation into Powell. He frames the stance as a defense of both Fed and DOJ independence, signaling that the floor path could remain constrained even if the committee proceeds.

Elizabeth Warren: PBS reported that Senator Elizabeth Warren pressed Bessent to rule out legal action against a future Fed chair over rate decisions aligned with presidential preferences. In that exchange, Bessent replied that such decisions would be “up to the president,” a remark that has intensified scrutiny of executive‑branch boundaries in the confirmation debate.