A group of Republican senators fired back at the Trump administration as the Justice Department targets Federal Reserve Chairman Jerome Powell with a criminal probe.
The investigation could lead to GOP lawmakers blocking the president installing his picks on the Fed going forward.
GOP Senator Lisa Murkowski spoke with Powell on Monday and called for an investigation into the Justice Department as the administration alleges its probe is about the ballooning cost of the Federal Reserve renovations. Powell warned in a remarkable video that it’s really about the Fed’s independence.
“If the Department of Justice believes an investigation into Chair Powell is warranted based on project cost overruns—which are not unusual—then Congress needs to investigate the Department of Justice,” Murkowski wrote on X. “The stakes are too high to look the other way: if the Federal Reserve loses its independence, the stability of our markets and the broader economy will suffer.”
Murkowski backed a threat from fellow Republican Senator Thom Tillis, a member of the Senate Banking Committee, to block any future Fed nominations by the president.
“If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” Tillis said in response to the investigation.
“It is now the independence and credibility of the Department of Justice that are in question,” Tillis warned. “I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved."
Another member of the committee, Senator Kevin Cramer, who has been deeply critical of Powell and the Fed, also slammed the allegation that the chair had done anything illegal.
He called Powell a “bad” chair and accused him of being “elusive with Congress” in a statement to the Daily Beast.
“I do not believe, however, he is a criminal,” Cramer said. “I hope this criminal investigation can be put to rest quickly along with the remainder of Jerome Powell’s term. We need to restore confidence in the Fed.”
Powell’s term as chair is set to expire in May. Trump is expected to announce his replacement soon. It’s not clear whether Powell will continue serving on the Fed after his term as chair ends, but his term isn’t set to end until 2028.
Across Capitol Hill, House Financial Services Committee Chair French Hill also praised Powell as a man of the “highest integrity” on Monday and rejected the criminal probe as an “unnecessary distraction” which could undermine the current and future administrations’ ability to make sound monetary policy decisions.
As some GOP lawmakers rushed to defend the independence of the Federal Reserve, every living former Fed chair and top economic officials from past Republican and Democratic administrations released a blistering joint statement backing Powell.
They warned that the Fed’s independence and public perception of independence are critical for the country’s economic performance.
“The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence,” they warned. “This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly. It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.”
The statement was signed by former Fed chairs Ben Bernanke, Alan Greenspan, and Janet Yellen, as well as former Treasury Secretaries Timothy Geithner, Jack Lew, Henry Paulson, and Robert Rubin, as well as the former chairs of the White House Council of Economic Advisers Jared Bernstein, Jason Furman, Glenn Hubbard, and N. Gregory Mankiw and Christina Romer.
On Friday, the Justice Department served the Federal Reserve with grand jury subpoenas as federal prosecutors carry out a criminal investigation into Powell regarding renovations to the Federal Reserve headquarters in Washington.
Trump has repeatedly attacked Powell for the ballooning costs of the project as he has carried out an ongoing pressure campaign against the Federal Reserve and the chair since before he even returned to office.
In late December, Trump claimed he was considering filing a “gross incompetence” lawsuit against Powell over the renovations’ cost. He has also ranted on numerous occasions that the Fed was too slow to bring down interest rates and attacked Powell, who he first nominated as chair during his first term, as “stupid.”
But in a video released late Sunday, Powell sounded the alarm about the investigation. He claimed it was not about renovations at all.
“No one, certainly not the chair of the Federal Reserve, is above the law,” Powell said. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
The Fed chair said the threat was not about his testimony before Congress last June or the renovations of Fed office buildings and claimed those were pretexts.
“The threat of criminal charges is 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,” Powell said directly to the camera.
However, some MAGA lawmakers attempted to downplay the probe. Kansas Republican Senator Roger Marshall made a bizarre suggestion during a Fox Business interview that the criminal investigation was just more Trump “trolling.”
The close Trump ally first said to let the “system play through here” in response to a question about whether the probe was political or serious.
“I think there’s other issues that we should be focused on. I think this is the president throwing out one more—maybe he’s even almost trolling here as well," Marshall added. “We’ve got bigger issues to go after than this one though.”
