WASHINGTON, Jan 12 (Reuters) – A growing number of Republicans in Congress expressed concern on Monday about the Trump administration’s threat to indict Federal Reserve Chair Jerome Powell, with two senators threatening to retaliate by blocking President Donald Trump’s central bank nominees and a third calling for the federal probe to end quickly.
At issue, the senators said, was confidence in the Fed, the world’s most important central bank, which sets interest rates in the U.S. and is seen by global investors as a critical independent force in helping manage the economy through political and other turbulence.
Senator Thom Tillis was the first to announce plans to resist the U.S. Justice Department’s criminal investigation, which became public Sunday night, and other key Republicans spoke up on Monday over concerns that Trump is meddling with the central bank’s traditional independence. The investigation concerns allegations that Powell misled Congress in testimony related to a renovation of the Fed’s headquarters complex in Washington.
Senator Kevin Cramer, a Republican member of the Senate Banking Committee, criticized cost overruns on that project and Powell’s performance as Fed chief 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. We need to restore confidence in the Fed.”
Republican Senator Lisa Murkowski threw her support behind Tillis’ plan to block Trump’s Fed nominees in response to news of the criminal investigation of Powell. Like Cramer, Tillis is also a member of the Senate Banking Committee, which oversees the Fed.
The lawmakers’ reactions pointed to another potential breach between the Trump administration and Republicans in Congress, who have largely shown fealty to the president but have broken with him recently over the release of files on convicted sex offender Jeffrey Epstein, the U.S. attack on Venezuela and healthcare subsidies. Trump said he did not ask the Justice Department to act against Powell.
News of the investigation pushed gold to a new high on Monday as the dollar lost value. The S&P 500 index opened lower but was slightly higher in afternoon trading.
WHITE HOUSE ACCUSED OF WEAPONIZING JUSTICE DEPARTMENT
Even some Trump loyalists expressed reservations about the criminal probe of the Fed chief. “We’ve got bigger issues to go after than this one,” Senator Roger Marshall, a Kansas Republican, told Fox Business Network’s “Mornings with Maria” program, adding that he thought “this is the president – maybe he’s almost trolling here.”
In the U.S. House of Representatives, Financial Services Committee Chairman French Hill praised Powell’s integrity and warned that criminal charges posed “an unnecessary distraction” that could undermine the central bank’s ability to make sound monetary policy decisions.
But House Speaker Mike Johnson said he would reserve judgment and let the investigation play out. “If Chairman Powell is innocent, then he can prove that and it will all come out,” the Louisiana Republican told reporters.
Others expressed support for the Trump administration’s actions. U.S. Representative Anna Paulina Luna, a hardline Trump ally, took credit on the social media platform X for referring Powell to the Justice Department for a criminal investigation in July. “This is the way,” the Florida Republican wrote. It was not clear whether her action had a role in launching the investigation.
The Fed chief called the Justice Department’s move a “pretext” for the White House to gain more influence over the setting of interest rates, which Trump argues should be lower in order to stimulate the economy.
Democrats said the Trump administration’s actions were ultimately aimed at helping Republicans in the midterm elections in November, which will determine which party controls the House and Senate in the final two years of Trump’s presidency.
Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, accused Trump of weaponizing the Justice Department “in plain view” to force the independent body to make political decisions to help Republicans in those elections, “even if it has disastrous long-term consequences for our economy and also for our economic structure.”
(Reporting by David Morgan; additional reporting by Bhargav Acharya, Susan Heavey, Jasper Ward and Nolan D. McCaskill; Editing by Nia Williams and Paul Simao)
Comments