Senate Republicans rally behind Powell as Trump DOJ pressure on Fed mounts

Senate Republicans closed ranks this week behind Federal Reserve Chair Jerome Powell, defending central bank independence as the Trump administration escalated its pressure campaign with Justice Department subpoenas and the threat of criminal charges. Powell, 72, went on the offensive, releasing a video statement accusing the administration of using “pretexts” to coerce the Fed into cutting interest rates. Even some of Trump’s most reliable Senate allies broke with the White House, calling the investigation unfounded and vowing to block administration nominees to the central bank until the legal cloud over the Fed chair is resolved.

The standoff marks a rare intraparty rupture, with Senate Republicans publicly rebuking a president of their own party over the independence of an institution Congress has historically shielded from direct political control.

Senate Republicans defended Federal Reserve Chair Jerome Powell on Thursday against a Trump administration pressure campaign that now includes Justice Department subpoenas and the threat of criminal charges — a response that has produced one of the sharpest intraparty rifts of Trump’s second term.

“I know Chairman Powell very well. I will be stunned — I will be shocked — if he has done anything wrong,” said Sen. John Kennedy, R-La., one of Trump’s most reliable Senate allies, according to the Associated Press.

Powell responded to the subpoenas by going on the offensive. In a video statement, he accused the administration of using “pretexts” to pressure the central bank into cutting interest rates sharply — a demand Trump has made repeatedly. “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said.

Republican senators move to block Fed nominees

Sen. Thom Tillis, R-N.C., who is retiring at the end of this year, announced he would withhold support for any Trump administration nominees to the Federal Reserve until the legal cloud over Powell is resolved. Sen. Lisa Murkowski, R-Alaska, put her support behind Tillis’s plan.

“I look at the situation with Jay Powell and this supposed investigation of the overhaul of their offices going over there as grounds to do nothing but intimidate, threaten and coerce,” Murkowski told reporters.

Senate Majority Leader John Thune, R-S.D., offered conditional skepticism, saying the investigation “better be real” and “better be serious.”

Sen. Dave McCormick, R-Pa., a first-term member of the Senate Banking Committee, said he agrees with Trump that Powell has been slow to cut interest rates, but drew a line at the criminal investigation. “I believe strongly in an independent Federal Reserve,” McCormick said, adding that he does not “think Chairman Powell is guilty of criminal activity.”

In the House, Financial Services Committee Chair French Hill, R-Ark., criticized the Justice Department’s probe. “I know Mr. Powell to be a man of integrity with a strong commitment to public service,” Hill said. “While over the years we have had our policy disagreements, I found him to be forthright, candid, and a person of the highest integrity.”

The accusations stem from a building renovation

The subpoenas relate to Powell’s public comments about a $2.5 billion renovation of two Fed office buildings, which Trump has criticized as excessive. The Justice Department’s investigation centers on those statements, according to the AP.

When asked by CBS News whether the subpoenas amounted to retribution, Trump said, “I can’t help what it looks like.” Trump also said he was unaware of the investigation into Powell.

Powell’s standing on Capitol Hill

Powell, a Republican who was appointed to the Fed’s governing board by President Barack Obama in 2012, was elevated to chair by Trump in 2018 and reappointed by President Biden in 2022. He has cultivated Capitol Hill relationships across party lines throughout his tenure, holding multiple calls with Republican senators in the days following his video statement.

Robert Tetlow, a former senior policy adviser at the Fed, described Powell’s congressional relationship-building to the AP. “He knows his way around Congress,” Tetlow said. “He gets in there, pets the dog, shoots the breeze, and has a way of getting people to like him, and he’s really good at it.”

At a news conference last July, Powell discussed the importance of keeping the Fed at a distance from “direct political control,” because that allows the central bank to take unpopular steps such as raising interest rates to thwart inflation. “I think that’s pretty widely understood,” he said. “Certainly, it is in Congress.”

Broader pattern of administration pressure

The subpoena of the Fed is part of a broader pattern. Trump’s administration also attempted to fire Fed board member Lisa Cook. The Supreme Court has allowed Cook to keep her job and is scheduled to hold a hearing on her case.

Other administration legal actions have faltered. Federal inquiries against former FBI Director James Comey and New York Attorney General Letitia James were rejected by the courts.

Lev Menand, a law professor at Columbia University and the author of a book about the Federal Reserve, said the attempt to threaten Powell with criminal charges has produced consequences the administration may not have anticipated. “So far it looks like this has been a misstep for the administration,” Menand said. “This attempt to go after Jay Powell with a potential criminal indictment is leading to significant resistance from elected officials even within the Republican Party.”