The Trump administration's criminal investigation into Federal Reserve Chair Jerome Powell has landed with a thud in Washington.
Several Republicans in the Senate and House on Monday broke with the administration to defend the central bank chief, questioning the probe and raising concern over the Department of Justice's (DOJ) independence.
White House officials earlier Monday defended President Trump's strong criticism of Powell after the Fed chair confirmed he was under investigation by the DOJ. Multiple reports indicated the U.S. Attorney for the District of Columbia, Jeanine Pirro, approved the probe last year.
By Monday evening, Pirro explained that the subpoenas sent to Powell and the Fed "were not a threat" but in response to what she characterized was a lack of communication on the part of the central bank.
"The word 'indictment' has come out of Mr. Powell’s mouth, no one else’s. None of this would have happened if they had just responded to our outreach," she said, vowing to pursue "decisions based on the merits, nothing more and nothing less."
Powell said officials are looking into testimony he gave before the Senate Banking Committee last year about the $2.5 billion renovations for two Fed buildings. Trump has repeatedly attacked Powell for cost overruns, including during his hard-hat tour with the Fed chair last summer.
GOP senators on Monday issued varying responses to the DOJ probe but mostly cast doubt, The Hill’s Alexander Bolton reports.
North Carolina Sen. Thom Tillis has been arguably the most vocal Republican critic of the investigation, saying he would not support advancing any additional nominees to the Fed while the investigation into Powell is ongoing.
“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,” he said Sunday.
Sen. Lisa Murkowski (R-Alaska) backed Tillis’s position to oppose Trump’s Fed nominees and called for a congressional investigation into the DOJ.
Tillis and Murkowski have been among the members of the GOP more willing to criticize Trump in the past, but questions about the move came from some closer allies as well.
“I haven’t seen the case or whatever the allegations or charges are, but I’d say they better be real and they better be serious,” Senate Majority Leader John Thune (R-S.D.) told reporters Monday.
Sen. John Kennedy (R-La.), who like Tillis is a senior member of the Senate Banking Committee, argued the investigation could make interest rates go higher.
“We need this like we need a hole in the head,” he said.
House Financial Services Committee Chair French Hill (R-Ark.), a close ally of the White House, called the investigation an “unnecessary distraction.”
Even a member of Trump's own Cabinet, Treasury Secretary Scott Bessent, is reportedly frustrated with the probe, believing it has "made a mess," Axios reported.
"The secretary isn't happy, and he let the president know," a source familiar with a phone call Bessent made to Trump told the outlet.
CNN also reported that Bessent has told people he is unhappy with the decision to launch the probe.
A spokesperson for the Treasury Department denied there's any "daylight" between Trump and Bessent.
Some Republicans have treaded more lightly. House Speaker Mike Johnson (R-La.) denied that the DOJ is being “weaponized” and said the investigation should "play out."
"There’s concerns about cost overruns, and whatever the allegations are, I don’t know,” Johnson told reporters. “I wasn’t involved in that … It’s something you have to look into. And so we’ll have to reserve judgment.”
Trump sought to distance himself from the probe, telling NBC News that he didn’t “know anything about it.” But that hasn’t tamped down outrage from Democrats and others who view the case as politically motivated.
The president hasn’t been shy about criticizing Powell for not being more aggressive in lowering interest rates, making clear that he will look elsewhere for a new Fed chair as Powell’s term is set to expire in May.
Yet even as his term as chair comes to an end, Powell would still have his position on the Fed’s board of governors through 2028 –– keeping him in the public spotlight and as a possible subject of Trump’s ire.
Powell argued the case is a result of the Fed setting interest rates based on “our best assessment” of what’s in the country’s interest rather than what Trump wants.
Financial markets ultimately didn’t react too strongly to the news. They opened the day with losses, with the Dow Jones Industrial Average down about 300 points shortly after trading started.
But stocks were mostly flat by noon, surprising some Wall Street veterans, The Hill’s Sylvan Lane and Max Rego report.
“If this had happened a year ago, or when Trump first came to office, or anywhere around that time, the markets would be going haywire,” said Dan Alpert, managing partner at Westwood Capital, a New York investment firm. “But they are numb at this point.”
▪ The Hill: DOJ move spooks experts, Republicans.
▪ The Hill: Former Fed chairs slam ‘unprecedented’ probe.
FRUSTRATION: The president is reportedly growing increasingly frustrated with Attorney General Pam Bondi, complaining to his aides that she's weak and ineffective, according to The Wall Street Journal.
The Journal reported Trump is upset with what he views as the DOJ's slow progress, particularly on the investigations into his foes, including former FBI Director James Comey and New York Attorney General Letitia James (D). The DOJ is appealing a ruling that dismissed indictments the DOJ filed against them late last year.
According to the Journal, Trump has also often complained about Bondi's handling of the Jeffrey Epstein files leading to continued difficulties for the administration. Although Bondi said the Epstein files were going to be released shortly soon after Trump took office, Congress stepped in to require their release after Bondi changed course.
The report said Trump is further upset that Bondi hasn't done more to pursue those he claims helped steal the 2020 presidential election.
A spokesperson for Bondi told the Journal she's focused on carrying out Trump's order to make the country safe, while Trump said in a statement that Bondi is doing an "excellent job" and is making "tremendous progress."
