WASHINGTON — A number of top Republicans on Capitol Hill are breaking with the Trump administration after the Justice Department announced a criminal inquiry into the Federal Reserve and its top official over the weekend.
The U.S. attorney’s office in the District of Columbia opened the investigation into Reserve Chairman Jerome Powell on Sunday over accusations he lied to Congress when he testified about the cost of renovations to the Fed’s headquarters building in Washington, D.C. Powell rejected the inquiry in a statement Sunday night, and some top Republicans made clear they would not move forward with certain agenda items until the matter was resolved.
Sen. Thom Tillis, R-N.C., was among the first to respond, vowing that he would not vote to confirm any nominee for the Federal Reserve, including the upcoming chair vacancy, until the investigation is finished. Tillis sits on the Senate Banking Committee, where he can freeze action if all Democrats follow his lead thanks to the panel’s slim margins.
“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 a statement on X. “It is now the independence and credibility of the Department of Justice that are in question.”
Sen. Lisa Murkowski, R-Alaska, offered the harshest criticism from a Republican senator, noting the investigation was “nothing more than an attempt at coercion” by the Trump administration.
“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,” she said in a statement. “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.”
Other Republicans on the Senate Banking Committee acknowledged concerns with Powell’s tenure, but stopped short of saying it required a criminal investigation.
“Jerome Powell is a bad Fed Chair who has been elusive with Congress, especially regarding the overruns of the elaborate renovations of the building,” Sen. Kevin Cramer, R-N.D., said in a statement. “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.”
Rep. French Hill, R-Ark., the top Republican on the House Financial Services Committee, similarly warned against taking any action that would threaten the stability of the Federal Reserve. Hill argued an investigation would be “an unnecessary distraction” that “could undermine this and future Administrations’ ability to make sound monetary policy decisions.”
“I’ve known Chairman Powell since we worked together at Treasury during the George H.W. Bush Administration,” Hill said in a statement. “Then, as now, I know Mr. Powell to be a man of integrity with a strong commitment to public service. While over the years we have had our policy disagreements, I found him to be forthright, candid, and a person of the highest integrity.”
Rep. Mike Lawler, another Republican on the House Financial Services Committee, echoed Hill’s sentiments that upholding the Federal Reserve should be a top priority.
“While I fundamentally believe Chairman Powell was late in addressing inflation under Joe Biden and has been woefully slow in lowering interest rates over the past year, the independence of the Federal Reserve is paramount and I oppose any effort to pressure them into action,” he said in a statement.
Thune: Powell investigation should be ‘resolved quickly’
Some Republicans, however, were less concerned with the investigation.
Utah Sen. Mike Lee, who has repeatedly called to dismantle the Federal Reserve, told the Deseret News that while “it’s no secret that I’m not a fan of the Federal Reserve, I’m not familiar with the details of this particular inquiry.”
“But hope to learn more in the coming days,” he added.
Sen. Cynthia Lummis, who sits on the Banking Committee, said she supported the investigation.
“Whether Chairman Powell was unprepared for his testimony or intentionally misled Congress about the Fed’s extravagant spending, the American people deserve answers,” Sen. Cynthia Lummis, R-Wyo., said in a statement. “I will wait for the DOJ to release its findings before commenting further.”
The investigation comes after months of threats from President Donald Trump to fire Powell, whom the president first nominated to the position in 2017. Trump said he did not direct the DOJ to open the investigation, but the inquiry marks an escalation into Trump’s pressure campaign against the chairman.
Powell’s appointment is set to expire in May, although he will need to stay in the position if Congress cannot approve a new nominee. Tillis has said he won’t vote to confirm another chairman until the DOJ probe is sorted.
Senate Majority Leader John Thune, R-S.D., sidestepped questions on whether he had concerns other senators would follow Tillis’ lead.
“People here react to this differently,” Thune told reporters on Sunday. “But again, without knowing exactly what it is they’re talking about here and what the allegations are, it’s hard to jump to any conclusions. But as I’ve said earlier, I mean, 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.”
Powell, for his part, accused the Trump administration of retaliating against the chairman for refusing to follow “the preferences of the President” when it comes to setting interest rates.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation,” Powell said in a statement.
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment,” he added. “Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”