Sen. Tim Scott said Wednesday that he hopes the federal investigation into Federal Reserve Chairman Jerome Powell will be “resolved” so the Senate can nominate Kevin Warsh, President Donald Trump’s pick to replace him as central bank chief.
Scott, who chairs the Senate Banking, Housing and Urban Affairs Committee, said on CNBC’s “Squawk Box” that “the completion of this process will allow us to have the Fed fully operational as intended.”
Sen. Thom Tillis (R.N.C.) has vowed to hold off on Fed nominations until the federal criminal investigation into Powell is resolved. Last year, President Trump floated the idea of firing Powell, slamming the Fed chairman for refusing to cut interest rates to the extent he wanted. Mr. Powell has denied any wrongdoing and said he was targeted because he did not comply with Mr. Trump’s demands.
Scott said Powell was scheduled to testify before Congress on February 11, but missed that day because of the federal investigation.
“I talked to Jay about his testimony,” Scott said. “I encouraged him to come to the committee.”
“At the moment he is more concerned about the criminal proceedings,” he said. “I understand that.”
Congress can compel elected officials to testify, but the Banking Committee did not testify against Mr. Powell in this case.
The Fed declined to comment on whether Mr. Powell had refused to testify.
Mr. Tillis has otherwise supported Mr. Warsh, whom President Trump nominated for the role in January, but he further tightened his blockade on Mr. Warsh after meeting with the Fed nominee on Tuesday.
“This is not a people issue, it’s a process issue,” Tillis said. “I think this is a foul.”
“This speaks to the fundamental principle of the Fed’s independence,” Tillis told reporters Tuesday. “Realistically, we have no idea what the market reaction would be if there was suddenly widespread recognition that the Fed chair is serving at the will of the president.”
Sen. Kevin Cramer (D), another Banking Committee member, told CNBC earlier Wednesday that he saw no reason why some Democrats wouldn’t support Warsh’s nomination.
“Based on what he has said and done, there is no reason why Democrats should not support his nomination,” said Kramer, who was scheduled to meet with Warsh on Wednesday. “Of course they’re going to be rigorous in interviewing him and cross-examining him when the hearings happen. But I think we need to get him on track to get him across the finish line so there’s no gap between the end of Jay Powell’s term and the beginning of a new one.”
The investigation into Mr. Powell is based in part on testimony he gave before the Senate Banking Committee last year. Mr. Scott has said in the past in testimony that he does not believe Mr. Powell committed a crime, and he reiterated that belief Wednesday. He said the Senate would begin Warsh’s confirmation hearing “as soon as possible.”
“At the end of the day, when he was in front of the committee, he was definitely unprepared,” Scott said of Powell. “I think he was woefully unprepared. But when he was before the committee, he committed no criminal acts.”
—Steve Liesman contributed to this report.
