WASHINGTON — President Donald Trump’s ongoing conflict with Federal Reserve Chairman Jerome Powell has intensified, prompting a Department of Justice (DOJ) investigation. This development is causing concern among some Senate Republicans, a key group Trump needs to secure approval for his next Fed chairman nominee after Powell’s term ends in May.
Senator Thom Tillis from North Carolina, a member of the closely split Banking Committee, stated he would oppose any Trump nominee for Powell’s seat if attempts are made to compromise the Fed’s independence. Tillis emphasized that the investigation now questions the DOJ’s credibility.
“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,” Tillis wrote. He plans to “oppose the confirmation of any nominee for the Fed” until the DOJ matter is resolved.
Powell’s Response
Since January, Trump has pressured Powell to lower interest rates and hinted at firing him. In a recent video, Powell disclosed DOJ subpoenas linked to his Senate testimony, suggesting the investigation is politically motivated due to the Fed’s independent rate-setting decisions.
He expressed concern over political pressure influencing monetary policy, stating, “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”
Trump nominated Powell in 2017 for a four-year term, citing his “steady leadership,” and President Biden re-nominated him in 2021 for a second term starting in May 2022. The Senate confirmed him both times.
Tillis’ Influence
Trump has yet to reveal his pick to replace Powell, but the nominee must pass the Senate Banking Committee, where Tillis holds sway. The committee’s 13 Republicans and 11 Democrats mean Tillis could block a nominee if Democrats oppose.
Democratic Senator Elizabeth Warren accused Trump of using DOJ powers to control the Fed for personal gain. “Trump is abusing the authorities of the Department of Justice like a wannabe dictator so the Fed serves his interests,” Warren wrote.
Murkowski’s Concerns
Senator Lisa Murkowski of Alaska voiced concerns over DOJ’s motives, describing the investigation as “an attempt at coercion.” She supported Tillis’ stance on blocking Fed nominees until the issue is resolved.
Senate Minority Leader Chuck Schumer criticized the DOJ’s actions as “bullying” by Trump, asserting that the Fed is not responsible for Trump’s economic challenges.
Former Fed officials released a statement defending the Fed’s independence as crucial to economic stability and criticized the DOJ inquiry as a threat to that independence.
White House Press Secretary Karoline Leavitt defended Trump’s right to criticize Powell, citing the First Amendment, and stated the DOJ would determine any criminal wrongdoing by Powell.
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