Even senators from Trump’s own party have a problem with his probe into Jerome Powell
The Federal Reserve Chair Jerome Powell has run into trouble with President Donald Trump, who seeks to have a larger role in the central bank's decision-making. As the president seeks to start a probe against the Fed chair, Republican Senator Lisa Murkowski of Alaska, Senator Thom Tillis of North Carolina, along with other lawmakers, have pledged to block President Trump's Federal Reserve nominees until the matter is solved and called for a congressional investigation into the Department of Justice (DOJ) over the "coercive probe."
Taking to X, Senator Murkowski described the DOJ's investigation as "nothing more than an attempt at coercion" to pressure the country's central bank into lowering interest rates. “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,” Murkowski wrote in her post on Monday. She joined Republican Senator Tillis, who, along with other lawmakers, pledged to block Federal Reserve nominees.
Senator Tillis is a member of the banking committee that oversees Fed appointments, and he is set to retire at the end of his term later this year. “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 on X. “It is now the independence and credibility of the Department of Justice that are in question," he added.
The matter came to light when Powell stated that the Fed had received subpoenas from the DOJ. According to Reuters, the investigation was approved and started by Jeanine Pirro, the U.S. Attorney in Washington, and an ally of the President. As per the publication's sources, neither the Attorney General Pam Bondi nor Deputy Attorney General Todd Blanche was briefed about the decision to subpoena the Fed. In a statement on X, Pirro shared that the DOJ took legal action because the central bank had ignored requests to discuss cost overruns in the renovation project of two historical buildings at its headquarters. "This office makes decisions based on the merits, nothing more and nothing less," Pirro added on X.
The confrontation comes amid a yearlong campaign launched by President Trump against Powell over disagreements regarding interest rates. Trump accused Powell, whom he nominated in 2017 during his first term, of being reluctant to slash interest rates. The president has called the Fed Chair "too-late Powell," a "numbskull," and a "Trump hater," while suggesting he could remove Powell before his term ends, The Guardian reported. Trump also threatened to take legal action over the Fed Chair's "grossly incompetent" handling of the D.C. renovations. Critics have alleged that the president's threats are an attempt to undermine the Fed's independence and exert control over interest rates.
In a video posted by the Federal Reserve on X, Powell said, “No one – certainly not the chair of the Federal Reserve – is above the law. But, this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.” However, Trump told NBC News that he wasn't aware of the investigation and denied pressuring the Fed Chair into lowering interest rates. “No. I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got,” he said.
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