Republican protests are growing louder on Capitol Hill as the Trump administration’s Department of Justice pursues a criminal investigation into Federal Reserve Chair Jerome Powell.
Powell on Sunday night revealed that the Justice Department opened an investigation into his handling of renovations to the central bank’s headquarters and his testimony about the matter to Congress. Powell said the investigation was an attempt to intimidate him by “threatening a criminal indictment” as he lowers interest rates at a slower pace than President Donald Trump desires.
U.S. Attorney for the District of Columbia Jeanine Pirro on Monday defended the investigation in a post to X and downplayed that a potential indictment is coming, arguing the “word ‘indictment’ has come out of Mr. Powell’s mouth, no one else’s.”
“The United States Attorney’s Office contacted the Federal Reserve on multiple occasions to discuss cost overruns and the chairman’s congressional testimony, but were ignored, necessitating the use of legal process—which is not a threat,” Pirro said. “None of this would have happened if they had just responded to our outreach. This office makes decisions based on the merits, nothing more and nothing less.”
The GOP resistance could derail Trump’s eventual pick to succeed Powell when the Fed chief’s term is up in May, as North Carolina Republican Sen. Thom Tillis, a member of the Senate Banking Committee, threatens to block any nominee to the central bank until the investigation is resolved. Tillis’ comments are now being echoed by other Republicans.
Sen. Lisa Murkowski, R-Alaska, wrote in a post on X, that the “administration’s investigation is nothing more than an attempt at coercion,” and called for a congressional investigation into the matter.
“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. “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.”
Tillis’ block is a massive problem for Trump, who has long sought to oust Powell and replace him with an ally. The Banking Committee is comprised of 13 Republicans and 11 Democrats, meaning one Republican defection can cause a deadlock and block a nominee from advancing.
Trump has repeatedly said he plans to replace Powell when his term as Fed chair is up in May. However, Powell could stay on as a governor until 2028.
And the chorus of Republicans criticizing the administration over the investigation is only getting louder as fears intensify about politicizing the central bank.
Sen. Susan Collins, R-Maine, told reporters on Monday that the investigation “raise[s] a lot of disturbing questions.”
“This potential indictment is not something I ever would have expected,” Collins said, noting that she had not yet reviewed the comments Powell made that the Justice Department is investigating. “And one can’t help but wonder if that’s more to do with the chairman’s resistance to the pressure from the White House when it comes to the interest rates.”
Sen. John Kennedy, R-La., who sits on the Banking Committee, warned that further conflict between the Fed and the White House could cause economic turmoil.
“I know Chairman Powell very well, I will be stunned, I will be shocked if he has done anything wrong,” Kennedy said. “If you wanted to design a system to guarantee that interest rates would go up and not down, the best way to do that would be to have the Federal Reserve and the executive branch of the United States get in a pissing contest.”
“We need this like we need a hole in the head,” Kennedy said.
Rep. French Hill, an Arkansas Republican who chairs the House Financial Services Committee, also weighed in on the matter.
“Pursuing criminal charges relating to his testimony on building renovations at a time when the nation’s economy requires focus and creates an unnecessary distraction,” Hill said.
“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,” he said.
Even Sen. Kevin Cramer, R-N.D., a Banking Committee member who is a frequent Powell critic, criticized the investigation.
“Jerome Powell is a bad Fed Chair who has been elusive with Congress, especially regarding the overruns of the elaborate renovations of the building,” Cramer said. “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.”
CNBC has reached out to Senate Banking Committee Chair Tim Scott, R-S.C., for comment on the investigation into Powell.
Trump does have one ally, however, in his administration’s push to investigate Powell: Sen Cynthia Lummis, R-Wyo.
“Whether Chairman Powell was unprepared for his testimony or intentionally misled Congress about the Fed’s extravagant spending, the American people deserve answers. I will wait for the DOJ to release its findings before commenting further,” Lummis said.
CNBC has reached out to the White House for a response to the members’ complaints.
This story is developing. Please check back for updates.