Trump administration's criminal probe of Fed Chair Powell sparks rare GOP revolt on Capitol Hill

• Sen. Thom Tillis (R-NC) and Sen. Lisa Murkowski (R-AK) pledged to block confirmation of any Federal Reserve nominee, including the next Fed chair whose term expires soon, until the investigation is resolved
• House Financial Services Committee Chair French Hill (R-AR) defended Powell's integrity and warned the probe 'creates an unnecessary distraction' when the economy requires focus
• The investigation centers on alleged testimony issues regarding Fed headquarters renovation cost overruns, though the $2.5 billion project is funded by the Fed itself rather than taxpayers

Trump DOJ Criminal Probe of Fed Chair Powell Triggers GOP Backlash

The Trump administration has launched a criminal investigation into Federal Reserve Chairman Jerome Powell, triggering rare bipartisan opposition on Capitol Hill and escalating tensions between the White House and the independent central bank.

Key Developments

The Justice Department probe centers on allegations related to Powell's congressional testimony regarding cost overruns on the Federal Reserve's headquarters renovation. The project, expected to cost $2.5 billion and complete in 2027, is funded by the Fed through interest on government securities, not taxpayer money.

Congressional Pushback

Sen. Thom Tillis (R-N.C.) announced he would block confirmation of any future Fed nominees until the matter is resolved, calling the investigation a threat to Fed independence. His Senate Banking Committee position gives this threat significant leverage, potentially creating a tied vote on future nominees.

Sen. Lisa Murkowski (R-Alaska) backed Tillis, calling the investigation "nothing more than an attempt at coercion" after speaking with Powell.

Rep. French Hill (R-Ark.), House Financial Services Committee Chair, defended Powell's integrity, calling the investigation "an unnecessary distraction" when economic focus is critical.

Sen. Elizabeth Warren (D-Mass.) accused Trump of attempting a "corrupt takeover" of the central bank and urged blocking all Fed nominees.

Market Implications

The confrontation poses the greatest challenge to Powell's eight-year tenure and threatens Fed independence at a critical time for monetary policy. Powell's term as Fed chair is approaching expiration, and the political standoff could complicate succession planning and undermine confidence in the central bank's autonomy, potentially destabilizing markets and economic policy.