The Trump administration’s decision to open a criminal investigation into Federal Reserve Chair Jerome Powell has Republican lawmakers with jurisdiction over the government’s central bank in the unusual posture of rebuking the move.
The probe, which was not entirely unexpected given that President Donald Trump has repeatedly called out Powell and the Federal Reserve for resisting calls to slash interest rates, has ruffled feathers on Capitol Hill for members who believe Powell should operate independently of the federal government.
Sen. Cynthia Lummis, who sits on the powerful Senate Banking Committee, told reporters she was “very surprised” that Trump’s Justice Department was looking at a criminal statute, given the high bar to provide evidence of illegal action. She added Monday evening, “Believe me, Chairman Powell and I have had big differences since I got here, from Day 1, and it’s been a really challenging relationship, but I just haven’t seen the type of intent that would warrant use of a criminal statute.”
Sen. Dave McCormick, another Republican on the panel and a top Trump ally, made the uncommon move to issue a statement Monday morning disagreeing with a criminal probe.
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“I believe strongly in an independent Federal Reserve,” he said. “I also agree with President Trump that Chairman Powell has been slow to cut interest rates. I think the Federal Reserve renovation may well have wasted taxpayer dollars, but the proper place to fix this is through Congressional oversight. I do not think Chairman Powell is guilty of criminal activity.”
When asked by reporters Monday evening to elaborate, McCormick said he wouldn’t discuss the matter further.
Powell — who’s known to be highly intentional about his public statements — posted a video online reacting to the subpoena, insisting that 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.”
The criminal investigation stems from Powell’s testimony before a Senate committee about a multibillion-dollar construction project that would restore the Federal Reserve’s historic buildings. Trump has repeatedly criticized the price tag of the renovation and alluded to wrongdoing on the part of Powell for the cost.
Powell appeared to be speaking to Senate allies Sunday and Monday after the subpoenas in an effort to drum up support for the institution, according to a post on X from Sen. Lisa Murkowski.
“After speaking with Chair Powell this morning, it’s clear the administration’s investigation is nothing more than an attempt at coercion. … 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. My colleague, Senator Tillis, is right in blocking any Federal Reserve nominees until this is resolved.”
Sen. Susan Collins told reporters she also spoke with Powell on Sunday night.
“I have always known him to be a man of integrity,” she said. “I have not yet reviewed the transcript that is at issue, which I intend to do. This may, however, be more about maintaining the independence of the Federal Reserve, which I support.”
Trump on Monday denied knowing about the subpoenas, telling NBC News on Sunday evening: “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings.”
Senate Majority Leader John Thune told reporters he was concerned about the “appearance of political interference” and wanted to know more information about the Trump administration’s investigation.
“Without knowing exactly what it is they’re talking about here and what the allegations are, it’s hard to jump to conclusions,” Thune said. “It’s really important that they get resolved quickly and that there not be any appearance of political interference with the Fed or its activities.”
Sen. Thom Tillis, who sits on the Senate banking panel, has said he will not confirm a new Federal Reserve chair, even if there’s a vacancy, until the legal matter is resolved. He told reporters Monday: “My message to the administration, my message to whatever, whoever, and — who went after what I consider to be vindictive prosecution, to grow up and give the president better advice.” Powell’s term as chair expires in May.
When asked about Tillis’ pledge to block a new chair, Thune was skittish.
“We want to make sure that there is good continuity, and that the central bank maintains its independence,” he said about a potential new chair.
Another Republican who often defends the Trump administration shared skepticism on Monday of the probe.
“I know Chairman Powell very, very well. I would be stunned if he did anything wrong,” Sen. John Kennedy told reporters. “Litigation between the Federal Reserve and the executive branch of the United States government is going to cause interest rates to go up, not down. We need this like we need a hole in the head.”
While the House does not have the power to confirm a Federal Reserve chair like the Senate does, Rep. French Hill, the top Republican on the House Financial Services Committee, nevertheless issued a statement Monday morning criticizing the subpoenas and defending Powell.
“Pursuing criminal charges relating to his testimony on building renovations at a time when the nation’s economy requires focus creates an unnecessary distraction,” he said. “The Federal Reserve is led by strong, capable individuals appointed by President Trump, and this action could undermine this and future Administrations’ ability to make sound monetary policy decisions.”
Other Republicans, perhaps concerned about markets becoming nervous about instability at the bank, emphasized that they don’t always love Powell’s positions as chair, but they don’t think he’s done anything illegal, either.
“Jerome Powell is a bad Fed Chair who has been elusive with Congress, especially regarding the overruns of the elaborate renovations of the building. He hid behind the Fed’s ‘independence’ when Biden was pouring fuel on inflation with the ARP and IRA, but openly encouraged Congress to bail out the economy during the pandemic,” Sen. Kevin Cramer, who sits on the banking panel, said in a statement. He added: “I do not believe however, he is a criminal. 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.”
Editor’s note: The headline of this article has be updated to clarify that Powell has not been charged, but was under criminal investigation.
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