Warsh Fed nomination hearing set for mid-April

The Senate Banking Committee will hold a nomination hearing on April 16 for Kevin Warsh to be the next chair of the Federal Reserve, a person familiar with the matter told CNBC.

Warsh’s nomination is moving ahead even as a separate criminal probe into the Fed continues, setting up a potential clash between the two parallel processes set in motion by the Trump administration.

Banking Committee member Sen. Thom Tillis, R.-N.C. has said he won’t vote to confirm Warsh until the probe is resolved. Yet President Donald Trump is eager to get Warsh confirmed.

Tillis’s opposition means Trump can’t do both. But by moving ahead with the hearing, he is trying to anyway.

The committee hasn’t yet put the hearing on its public schedule. Warsh and a spokesman for the Senate Banking Committee declined to comment.

Politico earlier reported that the committee had scheduled the hearing.

The criminal probe is looking into allegations that Jerome Powell, the current Fed chair, lied to Congress about the state of expensive renovations to the Fed’s offices. Powell has denounced the probe as a pretext to pressure him into lowering interest rates, as Trump has demanded.

Congress tasked the Fed with setting interest rates independent of political considerations. Central banks that act independently generally do better at fighting inflation. The risk of reaccelerating prices is increasingly a concern in the U.S. as the Iran war raises energy costs.

A federal judge has sided with Powell in the matter. Judge James Boasberg of the U.S. District Court for the District of Columbia on Friday declined a motion by the government to reconsider his decision to quash subpoenas into the Fed. That means the subpoenas aren’t moving forward, and the status of the investigation is unclear.

U.S. Attorney for Washington, D.C., Jeanine Pirro, a Trump appointee, has said she plans to appeal the ruling.

Pirro’s and Tillis’s offices didn’t immediately return weekend requests for comment.

Tillis has praised Warsh’s credentials but has said he won’t lift the blockade until his concerns for the Fed’s independence are lifted.

Sen. Elizabeth Warren, D-Mass., in March sent a critical letter to Warsh, predicting he would serve as a “rubber stamp for President Trump’s Wall Street First Agenda,” and accusing him of having learned “nothing from your failures” during a prior stint at the central bank.

Warsh previously declined to comment on the letter. Federal nominees rarely speak to the public before their hearings.

Meanwhile, other changes are afoot at the Department of Justice that could give prosecutors an opportunity to pivot on the Powell case. Trump on Thursday fired Attorney General Pam Bondi and appointed Todd Blanche temporarily as acting attorney general. He was a defense attorney for Trump before joining the administration.

The administration has said that it is the Department of Justice’s decision whether or not to investigate Powell. But Trump has repeatedly signaled that he supports the investigation.

“There is criminality” related to the Fed’s building expenses, Trump said on March 19.

If so, the government hasn’t proved it to the judge.

“The Government’s fundamental problem is that it has presented no evidence whatsoever of fraud,” Boasberg wrote in his ruling Friday.