DOJ Pulls Plug on Powell Probe After Tillis Hold, Opening Door for Warsh Fed Chair Vote

Presidential jousting with the Fed is hardly new—LBJ brow-beat Chair William McChesney Martin at the Stonewall ranch in 1965, and Nixon’s 1971 pressure campaign helped secure Arthur Burns’ compliance—but weaponizing federal prosecutors to cow a sitting chair edges closer to the 1937 FDR “Court-packing” style confrontation with an independent branch. The episode illustrates two converging trends: (1) the escalation of partisan hardball, where criminal investigations become bargaining chips, and (2) the erosion of norms shielding central-bank independence, already fraying since the 2008 crisis and turbo-charged by post-COVID populism demanding looser money. Whether Warsh’s likely confirmation cements executive influence or the Senate’s brief resistance (via Tillis’ single-vote blockade) revives oversight will echo for decades; a politicized Fed could skew dollar credibility, debt financing, and global monetary leadership well into the 22nd century, whereas a failed attempt may reaffirm the institutional guardrails erected after the 1951 Fed-Treasury Accord.