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Top Senate Republican says federal probe of Powell could pose challenge to Fed nominees
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Top Senate Republican says federal probe of Powell could pose challenge to Fed nominees
Mar 11, 2026 12:27 AM

WASHINGTON, Jan 12 (Reuters) - The top Republican in the U.S. Senate acknowledged on Monday that the Trump administration's threat to indict Federal Reserve Chair Jerome Powell could make it harder for Congress to confirm President Donald Trump's nominees for the U.S. central bank, after two Republican lawmakers threatened to block Fed nominees over the action.

Senate Majority Leader John Thune added his voice to those of Republicans calling for a speedy resolution of the criminal investigation to ensure confidence in the Fed's independence as the world's most important central bank, which sets interest rates in the U.S. and is seen ‌by global investors as a critical independent force in helping manage the economy through political and other turbulence.

Asked if the controversy could make it harder for the Senate to confirm future Fed nominees, including an eventual replacement for Powell, Thune ​replied: "It could make it challenging."

Senator Thom Tillis, a North Carolina Republican, was the first to announce plans to resist the U.S. Justice Department's criminal investigation, which became ‍public Sunday night, and other key Republicans spoke up on Monday over concerns that Trump is meddling with the central bank's traditional ⁠independence. The investigation concerns allegations that Powell misled ⁠Congress in testimony related to a renovation of the Fed's headquarters complex in Washington.

Republican Senator Lisa Murkowski threw her support behind Tillis' ​plan to block Trump's Fed nominees in response to news of the criminal investigation of Powell. ‌Tillis is ‌a member of the Senate Banking Committee, which oversees the Fed.

Thune acknowledged that more members ​could react similarly.

"It's really important that you get it resolved quickly and that there not be any appearance of political interference with the Fed or its activities," the South Dakota Republican said. Thune also said he had not seen the claims made against Powell but added: "They better be ⁠real and they better be serious."

Senator Kevin Cramer, another Republican member of the Senate ‍Banking Committee, criticized cost ​overruns on the Fed renovation project and Powell's performance as Fed chief but added: "I do not believe, however, he is a criminal. I hope this criminal investigation can be put to rest quickly along with the remainder of Jerome Powell's term. We need to restore confidence in the Fed."

The lawmakers' reactions ‍pointed to another potential breach between the Trump administration and Republicans in Congress, who have largely shown fealty to the president but have broken with him recently over the release of files on convicted sex offender Jeffrey Epstein, the U.S. attack on Venezuela and healthcare subsidies. Trump said he did not ask the Justice Department to act against Powell.

News of the investigation pushed gold to a new high on Monday as the dollar lost value. The S&P 500 index opened lower but was slightly higher in afternoon trading.

JOHNSON: 'IT WILL ALL COME OUT'

Even some Trump loyalists expressed reservations about the criminal probe of the Fed chief. "We've got bigger issues to go after than this one," Senator Roger Marshall, a Kansas ​Republican, told Fox Business ‍Network's "Mornings with Maria" program, adding that he thought "this is the president - maybe he's almost trolling here."

In the U.S. House of Representatives, Financial Services Committee Chairman French Hill praised Powell's integrity and warned that criminal charges posed "an unnecessary distraction" that could undermine the central bank's ability to make sound monetary policy decisions.

But ​House Speaker Mike Johnson said he would reserve judgment and let the investigation play out. "If Chairman Powell is innocent, then he can prove that and it will all come out," the Louisiana Republican told reporters.

Others expressed support for the Trump administration's actions. U.S. Representative Anna Paulina Luna, a hard-line Trump ally, took credit on the social media platform X for referring Powell to the Justice Department for a criminal investigation in July. "This is the way," the Florida Republican wrote. It was not clear whether her action had a role in launching the investigation.

The Fed chief called the Justice Department's move a "pretext" for the White House to gain more influence over the setting of interest rates, which Trump argues should be lower in order to stimulate the economy.

Democrats said the Trump administration's actions ​were ultimately aimed at helping Republicans in the midterm elections in November, which will determine which party controls the House and Senate in the final two years of Trump's presidency.

Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, accused Trump of weaponizing the Justice Department "in plain view" to force the independent body to make political decisions to help Republicans in those elections, "even if it has disastrous long-term consequences for our economy and ‍also for our economic structure."

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