Congress erupted after the Department of Justice announced a criminal investigation into Federal Reserve Chairman Jerome Powell over the $2.5 billion renovation of the Federal Reserve.
Part of the investigation involves previous statements made to the Senate Banking Committee in June, in which Powell was accused of misrepresenting facts regarding government spending on the Federal Reserve renovation. Powell, however, has claimed the investigation stems from his policy disagreements with President Donald Trump, not his congressional testimony.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” he said in a video statement posted to X on Sunday.
U.S. Attorney Jeanine Pirro defended the investigation in an X post on Monday night and argued that legal action was necessary because Powell ignored “multiple” inquiries from the Justice Department.
While some members of Congress have cast doubt on the administration’s investigation, others say it’s past time for the government to look more closely at the activities of the Federal Reserve.
Trump Has ‘Crossed the Rubicon,’ Says Democrat
Rep. Ro Khanna, D-Calif., slammed the investigation, telling The Daily Signal that Trump has “crossed the Rubicon.”
“We must stand with Jerome Powell and the independence of the Federal Reserve. The Trump administration has crossed the Rubicon,” Khanna claimed.
“Threatening criminal action against a Fed chair because he refuses to do the president’s bidding on interest rates undermines the rule of law, which is the very foundation for American prosperity,” Khanna continued, referencing Trump’s repeated calls for Powell’s firing over the Federal Reserve’s hesitance to cut interest rates.
Rep. Bill Foster, D-Ill., a member of the House Financial Services Committee, echoed Khanna’s remarks in a statement shared with The Daily Signal.
“Trump’s politically-driven ‘investigation’ of the Federal Reserve is a deliberate assault on that independence,” Foster said.
House GOP Divided
House Republicans, such as Reps. Randy Fine, R-Fla., and Eric Burlison, R-Mo., told The Daily Signal that additional oversight of the Federal Reserve is vital.
“I have long supported a full audit of the Federal Reserve and, ultimately, ending the Federal Reserve altogether,” Burlison said.
“I think there’s legitimate concerns about what he said before Congress,” Fine said of the investigation into Powell.
Just because the Federal Reserve is allegedly independent, “doesn’t mean you’re entitled to immunity,” Fine said of the investigation into Powell
“And it’s an investigation not a prosecution. It’s the government’s job to conduct oversight,” Fine said.
Rep. Anna Paulina Luna, R-Fla., who previously referred the chairman to the DOJ for an investigation in June over potential perjury, cheered the investigation on Monday.
“Unelected bureaucrats do not get a free pass. This is exactly why oversight exists,” Luna wrote.
Nevertheless, other members, like Rep. French Hill, R-Ark., chairman of the House Financial Services Committee, oppose the probe.
“Pursuing criminal charges related to his testimony on building renovations at a time when the nation’s economy requires focus creates an unnecessary distraction,” Hill wrote in a statement posted on X.
Rep. Mike Lawler, R-N.Y., echoed Hill’s concerns.
“The independence of the Federal Reserve is paramount and I oppose any effort to pressure them into action,” the New York Republican wrote.
Some GOP Senators Vow to Oppose Trump Nominations to the Fed
Five Senate Republicans, including four from the Senate Banking Committee, are questioning the administration’s actions against Powell.
Sen. Thom Tillis, R-N.C., told reporters that the officials who advised Trump on targeting Powell need to “grow up and give the president better advice.”
“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 added on X.
Tillis also vowed to “oppose the confirmation” of any Federal Reserve nominee until the investigation concludes: “I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved.”
Other Republican senators said the investigation was unnecessary.
“We don’t need it. We need it like we need a hole in our head. And everybody needs to take their meds and step back a little bit,” Sen. John Kennedy, R-La., told reporters on Monday.
Meanwhile, Sen. Dave McCormick, R-Pa., took issue with the investigation because he believes that Congress should take the lead, not the executive branch.
“I think the Federal Reserve renovation has likely wasted a lot of taxpayer money, but the proper place to fix this is through Congressional oversight,” McCormick said in a statement.
Like Tillis, Sen. Lisa Murkowski, R-Alaska, described the investigation into the chairman as an “attempt at coercion” and floated the idea of a congressional investigation of the DOJ.
Murkowski also said that Congress should be primarily responsible for these types of oversight efforts and joined Tillis’ Federal Reserve nominee blockade.
“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,” said Murkowski.
Senate Majority Leader John Thune, R-N.D., stressed the importance of resolving the matter promptly.
“It needs to be resolved quickly because the Fed’s role and the Fed’s independence in shaping monetary policy in the country is something we need to ensure proceeds without political interference,” Thune said.
