President Donald Trump’s administration has escalated its pressure campaign against the Federal Reserve, and Senate Republicans have moved to defend Fed Chair Jerome Powell even though the Justice Department served subpoenas on the central bank. The fight has widened inside the GOP as Powell accused the administration of using “pretexts” to pressure the Fed into sharply cutting interest rates, which Trump has demanded.
The dispute came after subpoenas related to Powell were served on the Fed. Soon after, Powell released a video statement accusing the administration of using “pretexts” to pressure the central bank into sharply cutting interest rates. AP reported that Powell also leaned on Capitol Hill relationships he has cultivated since his 2018 appointment, including holding multiple calls with Republican senators in the days after the video was released.
GOP Sen. John Kennedy of Louisiana, an ally described as among Trump’s most reliable in the Senate, said he knew Powell “very well” and added: “I will be stunned — I will be shocked — if he has done anything wrong,” according to the AP report. Other Republicans shifted from questioning Powell’s rate-setting decisions to defending his conduct and the Fed’s independence.
Some Republican senators said they would take procedural steps to press for resolution of the matter. Thom Tillis of North Carolina, described as among those rushing to Powell’s defense, vowed to withhold support for any Trump administration nominees to the Federal Reserve until the legal cloud surrounding Powell is resolved. AP also reported Tillis and Murkowski have been among the Republicans willing to critique the Trump administration in recent months, but that their backing of Powell is being treated as unusual because it includes allies who are not necessarily aligned with the Fed’s recent policy stance.
Sen. Lisa Murkowski backed Tillis’ plan to block nominees. She told reporters that she looked at the situation involving Powell and a supposed investigation of the overhaul of Fed offices as grounds to do nothing “but intimidate, threaten and coerce,” according to the AP report. Murkowski and other senators said they spoke with Powell after his video statement, with Powell going by “Jay” informally.
The criticism inside the GOP has also been mixed with party discipline on legal exposure and central bank independence. Sen. Dave McCormick said he believes “strongly in an independent Federal Reserve,” AP reported, adding that he agreed “with President Trump that Chairman Powell has been slow to cut interest rates.” But he said he does not “think Chairman Powell is guilty of criminal activity.”
Senate Majority Leader John Thune said the investigation “better be real” and “better be serious.” In the House, Financial Services Committee Chairman French Hill criticized the Justice Department’s investigation, saying, “I know Mr. Powell to be a man of integrity with a strong commitment to public service,” and describing Powell as forthright, candid, and “a person of the highest integrity,” AP reported. Hill also said he has known Powell since the two worked together at Treasury during the George H.W. Bush administration.
Powell has been a fixture in Washington for decades and has developed relationships across party lines. AP reported that he worked at the Bipartisan Policy Center from 2010 to 2012, pushed congressional Republicans toward compromise during budget battles with President Barack Obama, and was appointed to the Fed’s governing board by Obama in 2012 before Trump elevated him to chair in 2018. AP said Biden reappointed Powell in 2022.
The AP report also highlighted Powell’s efforts to stay connected to Congress. In a news conference last July, Powell discussed the importance of distancing the Fed from “direct political control,” AP reported, saying that separation allows the central bank to take unpopular steps such as raising interest rates to thwart inflation. AP reported that Powell also said “Certainly, it is in Congress,” and that Powell’s public schedule showed he met with or spoke by phone with 27 senators from both parties in the month after Trump’s inauguration last year.
The matter at the center of the dispute is tied to subpoenas that AP said relate to Powell’s comments about a $2.5 billion renovation of two office buildings that Trump has criticized as excessive. In the video statement, AP reported, Powell said: “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.”
Trump, AP reported, insisted he was unaware of the investigation into Powell. When asked by CBS News whether the subpoenas were a form of retribution, Trump said Tuesday, “I can’t help what it looks like.” The report placed the renewed attention on Powell in the broader context of Trump’s efforts to act against officials he sees as having done him wrong, while noting that some previous federal inquiries he pursued have been dismissed by the courts.
The potential stakes of the clash are also being judged inside the GOP. Lev Menand, a law professor at Columbia University and author of a book about the Fed, told AP that “So far it looks like this has been a misstep for the administration,” and said the attempt to go after Jay Powell with a potential criminal indictment was generating “significant resistance from elected officials even within the Republican Party.”
AP also noted that Republicans supporting Powell point to Powell’s interpersonal ties with lawmakers, including a March 2024 exchange in the Senate Banking Committee hearing room. In that hearing, Tillis told Powell that the office dog had said hello—“Gus sends his regards,” AP reported—and Powell replied, “I don’t want to disturb his nap,” a moment that drew laughter in the room.
Days after Powell’s video statement, AP reported that Republican senators including Murkowski and Tillis had been talking with him, and Powell received continued backing as the legal pressure campaign continued.