Is the "dust settled" for the position of Federal Reserve Chairman? Powell's nomination confirmation hearing will be held next week, but Justice Department investigation remains the biggest obstacle.

The senior Republican on the Senate Banking Committee, Tim Scott, said on Tuesday that the committee will hold a confirmation hearing next week for President Trump's nominee for Federal Reserve Chair, Kevin Warsh. Scott stated in an interview, "Next week we will have a hearing, and Kevin Warsh will be present. We will discuss the economy, price stability, inflation issues, and the independence of the Federal Reserve." Scott did not reveal the specific date of the hearing, but reports suggest that it will take place on April 21st. Sources revealed on Monday that Warsh has submitted the necessary financial disclosure documents to the Senate, marking an important step in the confirmation process. Submitting financial information is a prerequisite for initiating a Senate hearing. The hearing, originally scheduled for this week, was postponed due to document delays. Once the Senate Banking Committee receives Warsh's written responses to inquiries, the hearing arrangements could formally start as early as next week. Scott also expects that the Department of Justice will conclude its criminal investigation into a Federal Reserve overhaul in the coming weeks, clearing the way for Warsh's confirmation, and believes that previously opposing Senator Tillis will vote in favor at that time. When asked if he had specific information on the Department of Justice's intentions, Scott stated that he did not. Republican Senator Tillis from North Carolina had praised Warsh but stated that he would not support his confirmation until the Department of Justice investigation is resolved, as he believes it threatens the independence of the Federal Reserve. Following Scott's comments, Tillis reiterated this stance on Tuesday. "High-Risk" Confirmation Hearing This high-risk confirmation hearing will provide a platform for senators from both parties to scrutinize Warsh's positions on economic and monetary policy. Warsh previously served as a Federal Reserve Governor and as an economic policy adviser to President Trump. Investors are particularly interested in how Warsh will balance pressures from Trump to significantly reduce borrowing costs and economic conditions that do not yet support rate cuts in the short term. Rising energy costs from the Middle East conflict have disrupted the US economic outlook, exacerbating concerns about sustained inflation and weakness in the US labor market, which has led to greater policy uncertainty for the Federal Reserve. Against this backdrop, Federal Reserve policymakers have generally signaled a desire to maintain stable interest rates and assess the impact of the war. Given the multiple attacks from the Trump administration on the Federal Reserve, and inflation consistently exceeding the central bank's target for over five years, any improper answers regarding rate issues could undermine the credibility of a Federal Reserve led by Warsh. He may also face questioning on his planned reductions in the Federal Reserve's $6.7 trillion balance sheet and his views on bank regulation. A survey in early March showed that 69% of economists believed that Warsh, if confirmed as Federal Reserve Chair, would focus on achieving the Fed's 2% inflation target. Considering that Federal Reserve policymakers are typically seen as needing to fully commit to this goal, this percentage was surprisingly low. However, even if Warsh performs flawlessly in the committee hearing, as long as the Department of Justice investigation continues, there remains uncertainty in Warsh's path to Senate confirmation. Apart from Scott's comments on Tuesday, there is no indication that the Trump administration is dropping the investigation. A federal judge recently dismissed a subpoena issued as part of the investigation, followed by a rejection of the Department of Justice's request to reconsider the ruling. US Attorney Jenna Piat has pledged to appeal the ruling. Powell's Influence May Extend Although Powell's term as Federal Reserve Chair ends on May 15th, his term as a Board member will continue until January 2028. It is customary for an outgoing Federal Reserve Chair to resign from the institution entirely after their term ends, but Powell has stated that he will remain until the Department of Justice investigation is resolved "in a transparent and final manner." In addition to Tillis, other Republican senators have criticized the Department of Justice's investigation. Tillis has stated that he does not believe Powell committed any wrongdoing. Senator Kevin Cramer of North Dakota called the investigation a "waste of time." Furthermore, if Warsh is not confirmed before May 15th, Powell stated that he intends to serve as interim Chair and could continue as Chair of the Federal Open Market Committee (FOMC), responsible for setting rates. This means that the Trump administration continuing the investigation could not only delay Warsh's confirmation, but also allow Powell to retain significant control over monetary policy. However, Trump has stated that he is not concerned about the possibility of Warsh's nomination being delayed. He previously said in February, "If it happens, it happens."