A Republican senator has vowed to block all Federal Reserve nominations after the justice department opened a criminal investigation into the Fed chair, Jerome Powell, inflaming tensions over the central bank’s independence.
Thom Tillis of North Carolina, a member of the banking committee that oversees Fed appointments who is retiring at the end of his term later this year, said Sunday he would oppose any nominee for the Fed, including the upcoming chair vacancy, “until this legal matter is fully resolved”.
“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 wrote on X.
“It is now the independence and credibility of the Department of Justice that are in question.”
Alaska Republican senator Lisa Murkowski said she spoke with Powell Monday morning, writing on X: “it’s clear the administration’s investigation is nothing more than an attempt at coercion” and added that under their reasoning “then Congress needs to investigate the department of justice.”
The responses come days after the justice department subpoenaed the Federal Reserve on Friday as part of an investigation rooted in Powell’s testimony before the Senate in June about the ballooning costs of the Fed’s headquarters renovation. Powell confirmed the subpoena on Sunday and said the investigation was part of a pressure campaign linked to the administration’s frustration with the Fed’s interest rate policy.
“No one – certainly not the chair of the Federal Reserve – is above the law,” Powell said in a video posted by the Federal Reserve on X. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Since returning to office last January, Trump has waged a year-long campaign urging Powell to lower interest rates and has repeatedly suggested he might remove the Fed chair outright, though he has stopped short of doing so. Powell’s term expires in May, and Trump told Politico last month he would judge Powell’s successor on whether they were willing to cut rates immediately.
Donald Trump told NBC News on Sunday that he had no knowledge of the investigation, but criticized Powell’s performance. “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,” the president said.
Trump also denied the subpoenas had anything to do with interest rates. “No. I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got,” he said, adding that he believed the public was pressuring Powell.
The Federal Reserve operates as an independent entity within government meant to shield monetary policy from political interference. Central bank independence is considered essential by economists for maintaining economic stability and credibility.
“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 wrote in his statement.
