At a Glance
- Two GOP senators on the Banking Committee warn the DOJ subpoenas of the Federal Reserve threaten its independence.
- Sen. Thom Tillis vows to block any Fed nominees until the probe ends.
- Sen. Lisa Murkowski calls the investigation “coercion” and urges Congress to investigate the DOJ instead.
- Why it matters: The standoff could stall President Trump’s future Fed picks and rattle market confidence.
A widening Republican revolt is challenging the Justice Department’s criminal investigation into Federal Reserve Chair Jerome Powell, with key senators arguing the move endangers the central bank’s autonomy and vowing to halt confirmation of any new Fed nominees.
Banking Committee Rebels
Sen. Thom Tillis, R-N.C., a member of the powerful Senate Banking Committee, declared on Sunday evening that he will oppose every pending and future Federal Reserve nomination “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 posted on X. “It is now the independence and credibility of the Department of Justice that are in question.”
Tillis’s committee holds 12 Republicans and 11 Democrats. A single GOP defection paired with unified Democratic opposition would produce a 12-12 tie, effectively freezing nominees on the panel.
Sen. Lisa Murkowski, R-Alaska, told Jordan M. Lewis she spoke directly with Powell on Monday and labeled the probe “nothing more than an attempt at coercion.”
> “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,” Murkowski said. She praised Tillis’ blockade, calling it “right.”
Probe Centers on Testimony Over Building Costs
The DOJ issued subpoenas after Powell testified to Congress about cost overruns on a Fed facility renovation. Republicans critical of the inquiry note such budget issues are common and rarely trigger criminal inquiries.
Sen. Kevin Cramer, R-N.D., another Banking Committee Republican, conceded Powell “has been elusive with Congress” but 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,” Cramer said. “We need to restore confidence in the Fed.”
House GOP Divided
House Financial Services Chair French Hill, R-Ark., whose panel oversees the Fed, defended Powell as “a person of the highest integrity” and warned the subpoenas risk undermining “this and future Administrations’ ability to make sound monetary policy decisions.”
> “Pursuing criminal charges relating to his testimony on building renovations at a time when the nation’s economy requires focus creates an unnecessary distraction,” Hill said.
Conversely, House Speaker Mike Johnson, R-La., backed the investigation, telling News Of Philadelphia “they’re doing their job” when asked whether the probe harms DOJ credibility. Johnson called the allegations “serious” but added he had not personally reviewed Powell’s testimony.
Fed Independence Debate Intensifies
Powell, whose chair term expires in May, remains on the Board of Governors until 2028. In a Sunday video he framed the probe as retaliation, saying “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 clash follows months of public pressure from President Trump for lower interest rates. Trump nominated Powell in 2017 but has since branded him a “dummy” and “Too Late.”
Broader Pattern of DOJ Targets
The Federal Reserve probe is the latest in a string of Justice Department actions against frequent Trump critics:
- Former FBI Director James Comey was indicted, then the case was dropped after the prosecutor was disqualified.
- New York Attorney General Letitia James faced similar treatment; charges were later withdrawn.
- Former national security adviser John Bolton was indicted in October after clashing with the president.
The White House on Sunday referred inquiries to the Justice Department. A DOJ spokesperson declined comment on the Powell case but said Attorney General Pam Bondi instructed staff “to prioritize investigating any abuse of taxpayer dollars.” The Federal Reserve is not taxpayer-funded.
Market Implications
Sen. Roger Marshall, R-Kan., told Fox Business the probe feels like political theater, suggesting Trump is “almost trolling here” and arguing “we’ve got bigger issues to go after than this one.”
Murkowski summarized the stakes bluntly: “If the Federal Reserve loses its independence, the stability of our markets and the broader economy will suffer.”
Key Takeaways
- Republican opposition could leave the Fed Chair seat and any board vacancies in limbo.
- A tied Banking Committee vote would force Senate leadership to seek alternative pathways or negotiate concessions.
- Investors typically view threats to central-bank autonomy as negative for bond yields and the dollar.
With Powell’s term ending in months and no clear successor named, Capitol Hill’s next moves may determine both the Fed’s leadership and its perceived shield from political meddling.
