Federal Reserve Chairman Jerome Powell’s announcement that he was being threatened with indictment by the Department of Justice (DOJ) over alleged perjury during a Senate hearing has generated a harsh response from several Capitol Hill Republicans and former leaders of the central bank.
Powell announced on Sunday night that the DOJ was targeting him with subpoenas in connection to his testimony before the Senate Banking Committee last June regarding cost overruns on renovations at the Fed’s headquarters. Sen. Thom Tillis (R-NC), a senior member of the Senate Banking Committee, has threatened to block any Trump administration nominations to the Federal Reserve if criminal actions are pursued against Powell.
“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. It is now the independence and credibility of the Department of Justice that are in question,” Tillis said in a statement.
Sen. Lisa Murkowski (R-AK) echoed Tillis’ sentiments and went further to call for a congressional probe of the DOJ.
In a statement, Murkowski said, “After speaking with Chair Powell this morning, it’s clear the administration’s investigation is 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. 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. My colleague, Senator Tillis, is right in blocking any Federal Reserve nominees until this is resolved.”
Rep. French Hill (R-AR), chairman of the House Financial Services Committee, issued a statement citing his decades-long working relationship with Powell, whom he called a “person of the highest integrity.” He blasted the DOJ’s criminal inquiry as “an unnecessary distraction” that “could undermine this and future administrations’ ability to make sound monetary policy decisions.”
Sen. Roger Marshall (R-KS) was less confrontational than his colleagues but showed no interest in pursuing a criminal case against Powell.
“We’ll let the system play through here,” he said in an interview on Fox Business. “I think there are other issues we should be focused on. I think this is the president … almost trolling here. We got bigger issues to go after than this one, though.”
And Sen. Kevin Cramer (R-ND) offered a mixed message, calling Powell “a bad Fed Chair who has been elusive with Congress, especially regarding the overruns on the elaborate renovations of the building.” But Cramer 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.”
The New York Times reported House Speaker Mike Johnson (R-LA) told reporters that allegations against Powell were “serious” while noting that “if the investigation is warranted then they’ll have to play that out.” However, he refused to comment on the merits of the DOJ actions, claiming, “That’s not really my lane.”
Separately, a bipartisan coalition of three former Fed chairpersons (Alan Greenspan, Ben Bernanke, Janet Yellen), four former Secretaries of the Treasury, and other economic leaders issued a statement blasting the news that Powell faced a potential indictment.
“The Federal Reserve’s independence and the public’s perception of that independence are critical for economic performance, including achieving the goals Congress has set for the Federal Reserve of stable prices, maximum employment, and moderate long-term interest rates,” the statement said. “The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence. This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly. It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.”
White House Press Secretary Karoline Leavitt repeated Trump’s claims that he was unaware of the DOJ’s actions. But during a press briefing, Leavitt took digs at Powell by stating, “I do know one thing for sure: Jerome Powell is not very good at his job. As to whether he’s a criminal, that’s an answer the Department of Justice is going to have to find.”
The president has no public events scheduled for today and did not address the issue on his Truth Social website.
Photo by Joshua Roberts / International Monetary Fund / Flickr Creative Commons
