Coming soon: an unusual situation at the Fed’s top position

It’s just like the classic workplace sitcom premise: Two employees are about to change jobs when…a criminal probe threatens to hold everything up.

Given the awkwardness and abnormality of the leadership transition underway at the Federal Reserve right now, you’d have to pitch this as an auteur-driven cringe comedy. Maybe Mike White will wrap White Lotus Season 4 early.

Incoming Federal Reserve Chair Kevin Warsh’s confirmation process remains stalled by an ongoing Justice Department investigation into comments made by outgoing Chair Jerome Powell.

The investigation, which concerns brief remarks from Powell last summer regarding a Fed building renovation project, is currently being held up by Sen. Thom Tillis, a North Carolina Republican, who says he won’t vote to advance a new chair until Powell’s probe is closed.

“Tillis views the probe as politically motivated,” Bloomberg reported.

Coupled with Democrats on the same committee who also want to close the probe before moving ahead with a nomination, Tillis’s stance now effectively blocks Warsh’s nomination from moving forward (for now).

And here’s the prestige TV-level stakes: Powell’s tenure as chair is now in its final weeks, with his term set to end May 15. Powell can likely stay put until a new leader takes over, and he can stay on as a member of the Fed’s board of governors until 2028.

In the (increasingly likely) scenario that the next Fed chair isn’t confirmed ahead of Powell’s departure date, Powell said during a March 18 press conference that he’d remain in place on a temporary basis.

“That is what the law calls for,” he said. “That’s what we’ve done on several occasions—including involving me—and it’s what we’re going to do in this situation.”

With respect to his position on the board, Powell said he has “no intention of leaving the board until the investigation is well and truly over, with transparency and finality.”

That could be a minute: Days before the latest Fed meeting, a federal judge squelched grand jury subpoenas into the investigation, citing “abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the president or to resign and make way for a Fed chair who will.”

Meanwhile, Powell says he hasn’t made a decision yet on remaining at the Fed even after the probe concludes. He said he’d make that decision “based on what I think is best for our institution and the people we serve.”

And with that, folks, you have the building blocks for a future cringe workplace comedy classic. Just picture the tense watercooler convos.