The Department of Justice’s criminal investigation into Federal Reserve Chairman Jerome Powell has unleashed a flurry of rare rebuke from congressional Republicans and rebellion that could torpedo future Senate confirmations to the nation’s independent central bank.
The saga marks the latest in a string of recent breaks from President Donald Trump by members of his own party as he approaches the one-year mark of his second term, with GOP lawmakers bucking him just days ago on further military action in Venezuela, reinstating expired Obamacare subsidies, and the desire to take Greenland by force.
“I think it’s really important that it get resolved quickly and that there not be any appearance of political interference with the Fed or its activities,” said Senate Majority Leader John Thune (R-SD), warning of “challenging” confirmations ahead under the cloud of an investigation.
Sen. Thom Tillis (R-NC) is vowing to wield his power on the chamber’s Banking Committee to thwart any of Trump’s future Fed nominees until the DOJ inquiry concludes, which is based on allegations from Trump and administration officials that Powell may have lied to the panel in testimony last year about a renovation of the Federal Reserve’s Washington headquarters.
Powell, in an extraordinary video statement, rebuked the investigation as “a consequence” of the Fed not lowering interest rates fast enough to satisfy Trump’s long-running demands for more drastic rate cuts.
“If you want to make interest rates go up instead of go down, I can’t think of a better way than to have the Federal Reserve get into a pissing contest with the Executive Branch of government,” said Sen. John Kennedy (R-LA), a Banking Committee member.
Powell was nominated as Fed chairman by Trump in 2017 and is just months away from no longer leading the independent agency tasked with managing U.S. monetary policy. But with a 13-11 GOP majority on Banking, any one Republican can effectively block Trump’s desired replacement or any other openings. Discharging a deadlocked nominee out of committee would require 60 votes in the full chamber, something Republicans lack.
Tillis, who is not seeking reelection this year, said he’ll “oppose the confirmation of any nominee for the Fed — including the upcoming Fed Chair vacancy — until this legal matter is fully resolved.”
House Republicans also piled on the criticism, including from Finance Services Committee Chairman French Hill (R-AR), whose panel has jurisdiction over Powell and the Fed. Hill defended Powell as a “man of integrity with a strong commitment to public service,” adding that criminal charges could “undermine” the agency’s independence and create “an unnecessary distraction.”
Sens. Susan Collins (R-ME) and Lisa Murkowski (R-AK), a centrist duo, said they had recent conversations with Powell. Murkowski denounced the investigation as “nothing more than an attempt at coercion.”
GOP CHAIRMAN ISSUES DEFENSE OF POWELL IN BREAK WITH TRUMP
Even longtime critics of Powell who closely align themselves with Trump, such as Sens. Kevin Cramer (R-ND) and Cynthia Lummis (R-WY), expressed concerns about the DOJ’s actions. The Fed recently received grand jury subpoenas related to Powell’s testimony last year, according to his video statement, which included remarks to senators that overruns for a $2.5 billion Fed headquarters renovation were due to unexpected construction costs and inflation.
“Believe me, Chairman Powell and I have had big differences since I got here from day one, and it’s been a really challenging relationship,” Lummis told the Washington Examiner. “But I just haven’t seen the type of intent that would warrant use of a criminal statute.”
Zach Halaschak and Rachel Schilke contributed to this report.