Lawmakers raised concerns about the Department of Justice (DOJ) investigation into Federal Reserve Chair Jerome Powell, endangering President Donald Trump’s attempts to appoint a new leader for the central bank.
On Sunday, Powell disclosed that the DOJ had issued grand jury subpoenas to the Federal Reserve, with the threat of a criminal indictment stemming from his June testimony before the Senate regarding the Fed’s headquarters renovations—efforts that have experienced cost overruns.
Powell labeled the allegations as a pretext, stating the investigation actually targets the Federal Reserve’s capacity to set interest rates free from political influence. Trump has criticized Powell repeatedly over the past year for his unwillingness to lower rates, though the president claimed he was unaware of the DOJ probe.
However, Republican Senator Thom Tillis aligned with Powell’s view and instead blamed the DOJ.
“If there was any lingering doubt that advisors within the Trump administration are actively working to undermine the Federal Reserve’s independence, that doubt should now be gone,” Tillis stated. “Today, it is the independence and credibility of the Department of Justice that are under scrutiny.”
Tillis is a member of the Senate Banking Committee, which oversees the Federal Reserve and will vote on any nominee Trump proposes for the central bank.
Powell’s term as Fed Chair ends in May, and Trump has stated he already has a replacement in mind who will cut rates further. However, the DOJ probe into Powell could derail this plan.
“I will vote against the confirmation of any Federal Reserve nominee—including the upcoming Fed Chair position—until this legal issue is completely resolved,” Tillis announced.
Although Powell’s term as Chair ends in May, his term as a member of the Fed’s Board of Governors runs until 2028. Past Fed Chairs who stepped down from the chairmanship typically resigned from the board as well; Powell could opt to remain on the board to safeguard the Fed’s independence.
Democratic Senator Elizabeth Warren, who also serves on the Senate Banking Committee, accused Trump of attempting to push Powell off the Fed’s board “to finish his corrupt seizure of our central bank.”
“He’s misusing the law like a would-be dictator to make the Fed serve him and his billionaire allies,” she added. “The Senate must not act on ANY Trump nominee for the Fed.”