A key political obstacle to Kevin Wash's appointment as Federal Reserve Chair has been removed, as North Carolina Republican Senator Thom Tillis announced on Sunday that he would withdraw his opposition to Wash's nomination.
The biggest political obstacle to Kevin Wash becoming Federal Reserve Chair has been cleared, and his confirmation process is expected to advance rapidly this week.
According to Bloomberg, Thom Tillis, a Republican Senator from North Carolina and a member of the Senate Banking Committee, announced on Sunday that he would withdraw his blocking stance on Wash's nomination, clearing the way for a committee nomination vote scheduled for April 29.
Previously, the Department of Justice announced the closure of a criminal investigation into current Fed Chair Jerome Powell. Tillis stated that this decision alleviated his core concern regarding threats to the Federal Reserve's independence.
Wash enjoys broad support among Republican senators. The Senate Banking Committee has scheduled the nomination vote for April 29. If the committee passes it smoothly, the nomination will proceed to a full Senate vote. It is widely anticipated that the timing for his final confirmation aligns closely with Powell's term expiration on May 15.
Once confirmed, Wash is expected to initiate sweeping reforms. During his hearing last week, he called for the abolition of the 'dot plot' and a re-evaluation of the forward guidance mechanism. This suggests a fundamental overhaul of the core framework that has underpinned global asset pricing for the past 15 years, potentially leading to a comprehensive restructuring of the pricing logic in stock, bond, and currency markets.
Tillis Withdraws Opposition, Nomination Vote Set for April 29
Tillis previously held a crucial vote on the Senate Banking Committee and had explicitly pledged to block Wash's nomination as long as Powell was under investigation by federal prosecutors. He characterized this criminal investigation as an attack on the Fed's independence, believing its underlying intent was to force Powell to step down early.
On Friday, Washington D.C. federal prosecutor Jeanine Pirro announced on social media that she would drop the criminal investigation into the Fed's building renovation cost overruns and Powell's congressional testimony, transferring the review to the Fed's Office of Inspector General.
Tillis subsequently communicated with the Department of Justice and received assurances that the criminal case against Powell and the Fed had been 'completely and thoroughly concluded.'
'That was my initial issue because I felt the prosecutor in Washington thought this could be used as leverage to force Powell out early,' Tillis said in an interview with NBC. He stated that after receiving the Justice Department's assurance, he was 'prepared to move forward with Mr. Wash's confirmation process.'
In his Sunday statement, Tillis called Wash an 'outstanding nominee' and said 'it is time for the Fed to move beyond this distraction and return its full attention to its mission.'
Powell's Fate Remains Uncertain, Trump's Stance Leaves Room
Despite the accelerated confirmation process, the uncertainty surrounding Powell has not completely dissipated. Powell's term as Fed Chair expires on May 15, but his seat on the Federal Reserve Board lasts until 2028. The partial closure of the case by the Justice Department does not guarantee his departure from the Board.
When questioned by reporters on Saturday, Trump stated that with Pirro dropping the criminal investigation, Wash's confirmation path 'I suppose should be smooth.' However, he refused to give Powell a 'full clearance,' citing the ongoing Inspector General's review of the renovation overruns, saying 'I have an obligation to find out' the reasons behind the cost overruns.
This lingering uncertainty means pressure from the Trump administration will continue, which could ironically become a motivation for Powell to remain on the Board—even if Wash is ultimately confirmed by the Senate.
Wash Aims to Dismantle Forward Guidance, Asset Pricing Faces 'De-anchoring' Risk
Wash's policy stance might be more significant for markets than his confirmation itself.
During his April 21 hearing before the Senate Banking Committee, he explicitly called for abolishing the 'dot plot'—a chart published quarterly showing the interest rate projections of the 19 FOMC members—and criticized core PCE as a 'rough estimate.'
He characterized the high inflation of 2021-2022 as a policy failure rather than an external shock, refused to commit to maintaining the post-FOMC meeting press conferences, stating 'the pursuit of truth is more important than repetition.' He also hinted at potentially reducing the number of meetings per year but did not give a specific figure.
Wash's criticism targets the very mechanism of forward guidance—the entire framework through which the Fed communicates its policy intentions to the market in advance. This system, gradually built by Ben Bernanke after 2008, includes calendar-based guidance, conditional commitments, statements parsed word-for-word by the market, and the dot plot. It has quietly become the implicit foundation for global asset pricing over the past 15 years.
If Wash follows through, the core tool markets rely on to build interest rate expectations would be removed, causing the certainty premium to fade. Pricing models in stock, bond, and foreign exchange markets would all face systemic revaluation pressures.
