Democrats on the U.S. Senate Banking Committee demand postponement of the confirmation hearing for Fed Chair nominee Walsh.

Kevin Walsh, the nominee for Federal Reserve Chair put forward by President Trump, is expected to attend a hearing next Tuesday, but all 11 Democratic members of the Senate Banking Committee have launched a final round of pressure, demanding a delay in Walsh’s confirmation hearing.

On Thursday, Democrats sent a letter to Committee Chair, South Carolina Republican Senator Tim Scott, stating that Walsh’s nomination process should not proceed until criminal investigations targeting two current Fed officials—Fed Chair Powell and Fed Governor Cook—are concluded. They called for a public hearing on Trump’s involvement in these investigations.

Democrats wrote in the letter:

Both investigations appear to be part of the broader effort by the Trump administration to take control of components of the Federal Reserve.

They said that advancing Walsh’s nomination under current circumstances is not only inappropriate, but also unreasonable to believe the President’s claims—assuming he (despite his nearly undisguised signals) is unrelated to the prosecution of Chair Powell.

Currently, the Trump administration is embroiled in two legal disputes with the Federal Reserve. Trump has repeatedly and openly criticized the Fed, dissatisfied with its rate cuts not meeting his expectations.

Last year, Trump announced the dismissal of Cook, whose term was supposed to extend until 2038, citing unsubstantiated allegations of mortgage fraud. Cook herself has not been prosecuted and has filed a lawsuit to retain her position, a case now before the Supreme Court. While American judges have yet to make a ruling, in oral arguments in January they showed clear concern that if Cook’s dismissal were upheld, it could impact the Fed’s independence.

Meanwhile, the U.S. Department of Justice has launched a criminal investigation into Powell and his handling of a $2.5 billion renovation project at Fed headquarters. Recently, a federal judge dismissed subpoenas sent by prosecutors to the Fed regarding this project, but D.C. federal prosecutor Jeanine Pirro, a long-time Trump ally, says she will appeal. On Tuesday, members of Pirro’s team made an unannounced visit to the Fed’s construction site, indicating their office has no intention of dropping the case.

On Wednesday, Trump endorsed the investigation, saying it was also a probe into Powell’s “incompetence,” and threatened to dismiss Powell if he does not voluntarily step down at the end of his term. Initially, Trump insisted he had nothing to do with the investigation, but this week White House Chief Economic Advisor Kevin Hassett revealed that the Justice Department intervened at the President’s request to investigate cost overruns.

The investigation is currently impeding a smooth transfer of power, making it less likely that Walsh will be confirmed by the Senate before Powell’s term expires on May 15. Republican members of the Senate Banking Committee, notably North Carolina Senator Thom Tillis, have vowed to block any Fed Chair nominee until legal threats against Powell have been lifted.

Currently, the Republican majority on the committee is only 13 to 11, meaning a single opposing vote from Tillis is enough to prevent Walsh from reaching a full Senate vote.

If Walsh is not confirmed in time, Powell has stated he will remain as acting chair, believing this is supported by both law and precedent. However, there is growing concern outside that the Trump administration may challenge this assertion and try to replace him with another board member.

Legal experts point out there are two main reasons they believe Powell’s interpretation will be upheld: First, the Fed’s Board of Governors has delegated authority and can appoint any member to serve as acting chair during a vacancy; Second, three independent cases last year ruled that for positions requiring Senate confirmation—like the Fed Chair—the President cannot appoint an acting official without Senate support.

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