Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Lawmakers have sounded the alarm Department of Justice criminal investigation against Federal Reserve Chairman Jerome Powell, jeopardizing President Donald Trump’s efforts to appoint a new central bank leader.
On Sunday, Powell revealed that the DOJ had subpoenaed the Fed before a grand jury, threatening criminal indictment for its testimony before the Senate last June regarding headquarters renovations, which resulted in cost overruns.
He called the allegations a pretext and said the investigation was actually aimed at the Fed’s ability to set interest rates without political pressure. Trump attacked Powell for much of the last year for his reluctance to cut rates, although the president said he was unaware of the DOJ investigation.
But Republican Sen. Them Tillis agreed with Powell’s assessment and pointed the finger at the DOJ instead.
“If there was any doubt about whether advisors within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none. » he wrote in an article on. “It is now the independence and credibility of the Ministry of Justice that are in question.”
Tillis serves on the Senate Banking Committee, which oversees the Fed and would vote for anyone Trump tries to appoint to the central bank.
Powell’s term as president expires in May and Trump has said he already has someone in mind to replace him who would cut rates further. But the DOJ investigation into Powell could blow up that process.
“I will oppose the confirmation of any Fed nominee, including the next Fed chair vacancy, until this legal issue is fully resolved,” Tillis said.
While Powell’s term as chair expires in May, his term as a member of the Fed’s Board of Governors expires in 2028. When previous Fed chairs have resigned, they have typically also resigned from the board. Powell could choose to stay to preserve the independence of the Fed.
Sen. Elizabeth Warren, a Democrat who also serves on the Senate Banking Committee, accused Trump of trying to force Powell off the Fed board “to complete his corrupt takeover of our central bank.”
“He abuses the law like a would-be dictator, so the Fed serves him and his billionaire friends,” she added. “The Senate should not move ANY nominee from Trump to the Fed.”
