Senator to Block Warsh Nomination

Key Takeaways

• Senator Thom Tillis (R-NC) plans to block Trump's Fed nominee Kevin Warsh until the DOJ probe into Powell ends
• Tillis cites concerns about preserving Federal Reserve independence from political interference
• He also signalled limits on his support for the Iran conflict beyond the 60-day mark
• Gold has already surged past $4,600 an ounce this year, with Fed independence concerns cited as a key driver

North Carolina Senator, Thom Tillis, has announced that he plans to block Trump's Federal Reserve nominee until the Department of Justice's probe into Powell ends. The Senator said his motivation is to protect the independence of the Federal Reserve from political pressure. Preventing partisan politics from pressuring Fed decisions is meant to preserve confidence in the US financial system.

In a public statement, Tillis said: "Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable. I will oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ's inquiry into Chairman Powell is fully and transparently resolved."

This pushback from the GOP is somewhat of a surprise. According to the WSJ, Tillis has nothing to lose since he has already announced that he will retire at the end of his term. Tillis told media that he believes that Kevin Warsh is a perfect candidate, but he will not vote to confirm him until the criminal probe into Powell ends. He also avoided blaming Trump directly. According to NBC, he said that "somebody in the DOJ" was investigating Powell to "maybe garner favour from somebody in the White House".

The DOJ probe centres on the Fed's $2.5 billion renovation of its Marriner S. Eccles headquarters, with allegations the central bank misled Congress about cost overruns. Powell has rejected that framing, calling the criminal threat "a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president."

Iran War

Tillis also took time to weigh in on other issues, including the Iran war. Despite being a supporter of Trump's war effort by voting against Democrats and Senator Rand Paul, he stressed that they are approaching the 45-day point. He noted that he doesn't see a resolution anytime soon, which if true, could keep markets on edge for longer than expected. Beyond the 60-day mark, Tillis said it will be difficult to get his support.

The latest flashpoint came over the weekend, when the USS Spruance intercepted and seized the Iranian-flagged cargo ship Touska in the Gulf of Oman after the vessel refused to comply with the US blockade for six hours. Iran has accused the US of "maritime piracy" and warned its Armed Forces "will soon respond." With the two-week ceasefire set to expire Wednesday, the prospect of a near-term de-escalation looks increasingly unlikely.

Tillis's stance highlights the broader pressure on the administration to detail clearer goals and a timeline. With divisions emerging within the Republican Party itself, sustained support for the conflict may require firmer justification. The longer the conflict drags on, the greater the political and market uncertainty.

What it means for investors

The combination of questions over Fed independence and prolonged geopolitical tension is the kind of backdrop that has historically supported demand for gold and silver. Gold has already smashed past $4,600 an ounce this year, with silver above $86, after the DOJ's subpoenas to Powell in January triggered a rush to safe-haven assets. Julius Baer's Carsten Menke called increased interference with the Fed "a key bullish wildcard for the precious metals in 2026." When confidence in monetary institutions wavers and conflict drags on, hard assets like physical bullion often see increased interest as part of a diversified portfolio.

This article is general information only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.