Lawmakers sounded the alarm on the Justice Department’s criminal inquiry into Federal Reserve Chairman Jerome Powell, putting at risk President Donald Trump’s efforts to name a new central bank leader.
On Sunday, Powell revealed that the DOJ served the Fed with grand jury subpoenas, threatening a criminal indictment over his testimony before the Senate last June related to renovations on the headquarters, which has seen cost overruns.
He called the allegations a pretext and said the investigation was really aimed at the Fed’s ability to set interest rates without political pressure. Trump has attacked Powell for much of the last year over his reluctance to cut rates, though the president said he didn’t know about the DOJ probe.
But Republican Sen. Them Tillis agreed with Powell’s assessment and instead pointed the finger at the DOJ.
“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,” he wrote in a post on X. “It is now the independence and credibility of the Department of Justice that are in question.”
Tillis sits on the Senate Banking Committee, which oversees the Fed and would vote on anyone Trump tries to put on the central bank.
Powell’s term as chair expires in May, and Trump has said he already has someone in mind to replace him who will lower rates further. But the DOJ investigation into Powell could blow up that process.
“I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved,” Tillis said.
While Powell’s term as chair expires in May, his term as a member of the Fed board of governors expires in 2028. When prior Fed chairs have stepped down, they typically have resigned from the board as well. Powell could choose to stay to preserve the Fed’s independence.
Sen. Elizabeth Warren, a Democrat who also sits on the Senate Banking Committee, accused Trump of trying to force Powell off the Fed board “to complete his corrupt takeover of our central bank.”
“He is abusing the law like a wannabe dictator so the Fed serves him and his billionaire friends,” she added. “The Senate must not move ANY Trump Fed nominee.”
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