Democratic members of the Senate Banking Committee urged Chair Tim Scott on Feb. 3, 2026, in Washington, D.C., to pause consideration of Kevin Warsh’s nomination to lead the Federal Reserve until Department of Justice probes into Chair Jerome Powell and Governor Lisa Cook conclude. The DOJ is examining potential criminal conduct by Powell tied to cost overruns on the Fed headquarters renovation and is separately investigating Cook over mortgage-fraud allegations. President Donald Trump nominated Warsh last week to succeed Powell when his term ends in May 2026; Democrats said proceeding while two sitting Fed officials are under criminal inquiry would be improper. The demand, led by Ranking Member Elizabeth Warren, effectively makes any single Republican defection on the committee sufficient to block advancement of the nomination.
Key Takeaways
- Democrats on the Senate Banking Committee asked Chair Tim Scott to postpone any Warsh nomination proceedings until DOJ probes into Chairman Jerome Powell and Governor Lisa Cook are closed.
- The DOJ is investigating Powell over cost overruns on the Federal Reserve headquarters renovation and is separately probing Cook on mortgage-fraud allegations.
- President Trump announced Warsh’s nomination in late January/early February 2026 to replace Powell when his term expires in May 2026.
- The Banking Committee split is 13 Republicans and 11 Democrats; one Republican defection would deadlock the panel and prevent the nomination from advancing.
- Sen. Thom Tillis (R-N.C.) signaled he will oppose Fed nominees until the Powell inquiry is resolved, increasing the likelihood of a committee stalemate.
- Democrats characterized the timing of the nomination as an attempt by the White House to shape Fed leadership while DOJ probes are active.
- If the committee is deadlocked, the nomination cannot move to the full Senate without additional procedural action or a change in support.
Background
Federal Reserve leadership is a keystone of U.S. economic governance; chairs serve four-year terms and exert significant influence over monetary policy, bank supervision and financial stability. Jerome Powell’s current term runs through May 2026, and a nomination to replace him triggers a high-stakes confirmation process that typically involves public hearings and a committee vote before floor consideration. Historically, Fed confirmations have been politically contentious, but simultaneous criminal probes of sitting Fed officials are without recent precedent and have heightened partisan tensions.
The Department of Justice has opened inquiries into two Fed officials: one focused on cost overruns related to the renovation of the Federal Reserve’s headquarters tied to Powell, and another examining mortgage-related allegations involving Governor Lisa Cook. Those investigations have drawn scrutiny because they intersect the independence of the central bank and the executive branch’s use of law-enforcement tools. Senate Democrats worry that advancing a nominee while probes are active could allow a President to exploit ongoing investigations to influence or replace Fed leadership.
Main Event
On Feb. 3, 2026, the eleven Democratic members of the Senate Banking Committee — led by Ranking Member Elizabeth Warren — sent a formal letter to Chair Tim Scott requesting a halt to any Warsh nomination proceedings until the DOJ investigations into Powell and Cook are complete. The Democrats argued the timing of the nomination amid active inquiries risks politicizing both the confirmation process and the Justice Department’s work. They emphasized that moving forward now would allow a single Republican committee member to determine the outcome if one defects, which is the current practical consequence of the committee’s 13–11 party division.
The Trump administration announced Kevin Warsh’s nomination last week; the White House and supporters describe Warsh as a former central banker and investment-banking executive with experience relevant to Fed leadership. Republicans on the committee have signaled support for a prompt confirmation process, framing the nomination as routine succession planning for the Fed. However, Sen. Thom Tillis (R-N.C.), a committee member, publicly stated he will oppose confirmations for any Fed nominee until DOJ inquiries are resolved, an unusual cross-party blockade that strengthens Democratic leverage.
Democrats framed their request as a safeguard for institutional integrity. Their letter warned that allowing the DOJ probes and the nomination to proceed in tandem could amount to the executive branch exerting undue influence over an independent central bank. Chair Tim Scott faces a procedural choice: schedule hearings and a committee vote now, or accede to the delay and wait for the DOJ to conclude its work. Either path carries political and governance consequences for the Fed’s transition timeline before Powell’s term ends in May.
Analysis & Implications
Short-term, the Democrats’ demand and Tillis’s pledge make a committee stalemate likely unless Republicans can secure unanimous support within their ranks. A deadlocked committee would stall Warsh’s advance to the Senate floor and could delay a final confirmation vote past Powell’s term expiration, creating uncertainty about who will lead the Fed during a politically and economically sensitive period. For markets and policy observers, prolonged ambiguity about Fed leadership can increase volatility because monetary-policy direction hinges in part on the chair’s outlook.
Politically, the episode sharpens concerns about the politicization of both the Fed and the Justice Department. Democrats frame the DOJ probes as potentially being used to clear the path for a preferred White House nominee; the White House and its allies counter that investigations are independent and should not be conflated with personnel decisions. If investigations produce indictments or other criminal findings, the reputational fallout for the Fed would be significant and could reshape the confirmation debate.
Procedurally, there are ways around a committee deadlock, including discharge petitions or negotiating additional committee hearings, but those options carry costs and consume time. A protracted battle could push a final confirmation vote into late spring or summer, which in turn affects the Fed’s ability to plot a steady course for monetary policy. Finally, the situation raises questions about norms: whether DOJ activity tied to senior officials should automatically pause high-level nominations to preserve institutional independence.
Comparison & Data
| Item | Detail |
|---|---|
| Banking Committee composition | 13 Republicans, 11 Democrats |
| Powell term end | May 2026 |
| Warsh nomination | Nominated by President Trump in late Jan/early Feb 2026 |
| Majority effect | One Republican defection can deadlock committee |
The table summarizes the arithmetic driving the immediate strategic decisions. Committee math (13–11) means a single Republican opposing the nominee is sufficient to block advancement; combined Democratic opposition plus Tillis’s stance makes that outcome plausible. The timeline shows limited runway before Powell’s term expires in May 2026, intensifying pressure on lawmakers to resolve the standoff quickly or manage an interim leadership outcome.
Reactions & Quotes
“We demand that you delay any nomination proceedings for Mr. Warsh until after the… investigations have been closed.”
Senate Democrats (letter led by Sen. Elizabeth Warren)
This excerpt summarizes the Democrats’ principal demand in their written communication to Chair Scott, framing the request as a pause until DOJ inquiries conclude.
“My position has not changed: I will oppose the confirmation of any Federal Reserve nominee… until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved.”
Sen. Thom Tillis (R–N.C.)
Tillis’s statement signals an uncommon intraparty break that increases the odds a single Republican vote could stymie the committee process.
Unconfirmed
- Whether DOJ inquiries will lead to criminal charges against Powell or Cook remains unresolved; investigators have not announced any indictments as of Feb. 3, 2026.
- Allegations regarding Cook’s mortgage activity and the full factual record behind Fed headquarters cost overruns tied to Powell are still subject to evidentiary development and have not been adjudicated.
Bottom Line
The Democratic request to delay Kevin Warsh’s nomination, combined with Sen. Tillis’s opposition, makes a committee deadlock a likely immediate outcome and complicates a swift confirmation before Jerome Powell’s term ends in May 2026. That procedural hurdle underscores how legal inquiries into sitting Fed officials can ripple into succession planning, elevating political and market uncertainty.
Resolving the standoff will require either the conclusion of the DOJ investigations, a change in committee votes, or an extraordinary procedural path to move the nomination forward. Each option carries trade-offs for norms around institutional independence, the timing of Fed leadership, and the political dynamics between the executive branch and Congress.
Sources
- CNBC — news report summarizing the letter from Senate Democrats and committee developments