Republican senators criticize Jerome Powell investigation: 'Advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve'

A group of Republican senators targeted the administration over its criminal investigation against Jerome Powell, chairman of the Federal Reserve (Fed). Some are even members of the Senate Banking Committee, who are responsible for approving presidential nominees to the Fed chairmanship. Trump would need their support should he succeed in removing Powell to appoint a replacement.

That committee is also the one before which the 72-year-old banker testified last June. This testimony is the subject of the new Department of Justice (DOJ) investigation. Prosecutors postulate that Powell may have provided senators with misleading information about the scope and costs of a project to modernize a Fed complex in Washington. However, the version told by Powell is very different: the investigation is a "new threat" from the administration against the institution he leads because it refuses to cut interest rates by submitting to "the preferences of the president."

Sen. Thom Tillis is one of the Banking Committee members who backed Powell's version. "It's another example of amateur hour," the North Carolina lawmaker said shortly after learning the news. He then took to social media, where he sharpened the criticism by assuring that there should no longer be any doubt that "advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve."

"It is now the independence and credibility of the Department of Justice that are in question," he also added before sending a warning to the White House: "I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved."

Powell's term as central bank chairman ends in May, although he will remain at the institution as governor until 2028. The administration may then seek to appoint another chairman. He can only be removed early for cause, generally understood as serious misconduct.

"We need this like we need a hole in the head," said Sen. John Kennedy, also on the Banking Committee. The veteran Louisiana politician said he knew the Fed chairman "very well" and would be surprised if he had committed any wrongdoing. He also predicted that the Fed-government confrontation would only led to a raise in interest rates.

He was joined in his discontent by Kevin Cramer and Dave McCormick, also members of the committee. Although both criticized Powell's policies, they also spoke out against the investigation.

Outside the committee, other Republican lawmakers came out in defense of the Fed chairman. "I have always known him to be a man of integrity," said Republican Senator Susan Collins after talking with Powell. "This may be more about maintaining the independence of the Federal Reserve, which I support." Also speaking out against the investigation were lawmakers Mike Lawler, French Hill and Lisa Murkowski, among others.

Tim Scott: The big absentee

One of the most important voices on the Senate Banking Committee (or the most) has remained silent: Chairman Tim Scott.

The South Carolina senator led the Powell hearing in June. Scott declined to comment when reporters specifically asked his opinion.

Though his silence is not unusual, considering that he doesn't usually make controversial statements nor did he speak out after other instances of Trump’s criticism of Powell. However, it contrasts not only with the reproachful words of the other members of the committee but also of his counterpart in Congress, Financial Services Chairman French Hill:

I’ve known Chairman Powell since we worked together at Treasury during the George H.W. Bush Administration. Then, as now, I know Mr. Powell to be a man of integrity with a strong commitment to public service. While over the years we have had our political disagreements, I found him to be forthright, candid, and a person of the highest integrity."

"Pursuing criminal charges relating to his testimony on building renovations at a time when the nation's economy requires focus creates an unnecessary distraction. The Federal Reserve is led by strong, capable individuals appointed by President Trump, and this action could undermine this and future Administrations' ability to make sound monetary policy decisions."

Prosecution defends investigation

Jeanine Pirro, U.S. attorney for the District of Columbia, claimed the Fed had ignored "multiple" requests for information from her office. "Necessitating the use of legal process—which is not a threat."

"The word 'indictment' has come out of Mr. Powell’s mouth, no one else’s. None of this would have happened if they had just responded to our outreach," added Pirro. "This office makes decisions based on the merits, nothing more and nothing less. We agree with the chairman of the Federal Reserve that no one is above the law, and that is why we expect his full cooperation."