Republican Senator Tillis: If Congress takes over the Justice Department’s investigation of Powell, he may support moving forward with the Walsh nomination process.

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Republican Senator Thom Tillis stated that if the Department of Justice drops its criminal investigation into Powell and allows Congress to initiate an independent investigation, he would consider no longer blocking Walsh's nomination process for Federal Reserve Chair.

At Tuesday's hearing on Walsh's nomination, Tillis once again criticized Trump's "absurd" investigation into the Federal Reserve building renovation project and current Chair Powell; he also told reporters that if Trump backs down and the DOJ drops the case, and Congress launches a separate oversight investigation, he would reconsider his position.

Tillis' statement opens a crack in the stalemate over Walsh's nomination. Given that Republicans have only a slim majority of 13-11 on the Senate Banking Committee, his single dissenting vote is enough to prevent Walsh's nomination from reaching a full Senate vote.

But so far, there is no sign of Trump or the DOJ backing down. Just hours before the hearing began, Trump publicly stated that the DOJ should continue investigating Powell and refused to consider any proposals to halt the investigation.

Congress-led Investigation as a Potential Compromise

Tillis' statement echoes remarks made earlier in the day by Senate Banking Committee Chairman Tim Scott. Scott said he hoped the committee would establish a "special committee" to provide permanent oversight over building projects within its jurisdiction.

This approach offers common ground for all sides: transferring investigative authority over the Federal Reserve's construction projects from the DOJ to Congress in exchange for advancing Walsh's nomination.

Tillis himself also pointed out that this arrangement fits the normal logic of checks and balances—judicial investigations typically require formal referral from a congressional committee, and that prerequisite doesn't exist in this case.

It is worth noting that in February Tillis was noncommittal about a similar approach, but this time his attitude has clearly softened, which may shift market expectations for the Walsh nomination.

No Indication of Compromise from Trump and DOJ

However, this "way out" still faces major obstacles. Just hours before the hearing, Trump publicly stated that the DOJ should continue its investigation into Powell and refused to accept any calls to halt the process.

He has previously pressured the Federal Reserve for rate cuts and has repeatedly criticized Powell in public.

The DOJ also shows no sign of backing down. According to reports, last Wednesday, three DOJ officials attempted a surprise visit to the Federal Reserve's Washington office, even though a federal judge had already ruled last month to block subpoenas related to the case.

This means whether Tillis's "drop the case first, then proceed" path can be realized will depend on whether the White House is willing to yield—and as of now, that possibility remains unclear.

Background to the Stalled Nomination

Powell's term as Federal Reserve Chair will expire next month, and Walsh has been nominated to succeed him.

Tillis previously stated that as long as the DOJ continues its investigation into Powell, he will block a vote on any Federal Reserve nominee, arguing that the investigation threatens the Fed's independence.

With the committee split 13-11, Tillis's vote is decisive—his opposition alone is enough to halt Walsh's nomination in committee, preventing it from reaching a full Senate vote.

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