Republican senators broke ranks with President Donald Trump on Monday, joining Democrats in condemning the Justice Department’s criminal investigation of Federal Reserve Chair Jerome Powell and threatening to block Trump’s nominees to replace him.
Sen. Lisa Murkowski, R-Alaska, said she spoke with Powell on Monday morning and concluded the investigation is “nothing more than an attempt at coercion.”
“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.
She joined Sen. Thom Tillis, R-N.C., who announced Sunday he would oppose any Trump nominee to the Fed until the matter resolves. Both sit on the Banking Committee, which votes on Fed nominations. With 13 Republicans and 11 Democrats on the panel, their defection could deadlock confirmation votes at 12-12.
“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 said. “It is now the independence and credibility of the Department of Justice that are in question.”
Treasury Secretary Scott Bessent told Trump in a Sunday night call that the probe “made a mess” and could damage financial markets, according to Axios. Sources said Bessent expressed frustration that Powell now appears more likely to remain on the Fed’s Board of Governors through January 2028 rather than stepping down after his term as chair expires in May.
“The secretary isn’t happy, and he let the president know,” one source told Axios. A Treasury spokesperson denied the account, saying “there is zero daylight between Secretary Bessent and President Trump.”
Even Republicans critical of Powell condemned the investigation. Sen. Kevin Cramer, R-N.D., called Powell “a bad Fed Chair who has been elusive with Congress” but added, “I do not believe however, he is a criminal.”
Sen. John Kennedy, R-La., told reporters he would be “stunned” if Powell “had done anything wrong,” adding, “My thought was, we need this like we need a hole in the head.”
Former Fed chairs and Treasury secretaries spanning four decades — including Republicans Alan Greenspan, Ben Bernanke and Janet Yellen — issued a joint statement Monday warning that the investigation resembles tactics used in “emerging markets with weak institutions.”
“The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence,” the statement said. “This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly.”
Rep. French Hill, R-Ark., who chairs the House Financial Services Committee and worked with Powell at Treasury during the George W. Bush administration, defended Powell’s integrity while noting the investigation creates “an unnecessary distraction.”
Trump denied involvement in the investigation during a Sunday NBC interview, saying “I don’t know anything about it” while criticizing Powell as “not very good at the Fed, and he’s not very good at building buildings.”
Sources told Axios that US Attorney Jeanine Pirro’s office in Washington launched the probe without notifying Treasury, senior White House officials or the main Justice Department.
Financial markets showed a limited reaction on Monday. The dollar briefly weakened, and gold prices rose, but stocks recovered by afternoon.
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