Republican senators expressed concern Monday about the Trump administration’s threat to indict Federal Reserve Chair Jerome Powell, while two lawmakers threatened to retaliate by blocking President Donald Trump’s central bank nominees and a third called for the federal investigation to end quickly.
The issue, the senators said, was trust in the Fed, the world’s most important central bank, which sets U.S. interest rates and is seen by global investors as a key independent force in helping manage the economy amid political and other turmoil.
Senator Thom Tillis was the first to announce plans to resist the US Department of Justice’s criminal investigation, which became public on Sunday night, and other leading Republicans spoke out on Monday about concerns that Trump is interfering with the traditional independence of the central bank. The investigation concerns allegations that Powell misled Congress in testimony related to a renovation of the Fed headquarters complex in Washington.
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“Jerome Powell is a bad Fed chairman who has been evasive with Congress, especially regarding the excesses of the building’s elaborate renovations,” Senator Kevin Cramer, a Republican member of the Senate Banking Committee, which has jurisdiction over the Fed, said in a statement. “I do not believe, however, that he is a criminal. I hope this criminal investigation can be brought to a close quickly, along with the remainder of Jerome Powell’s term. We need to restore confidence in the Fed.’
Republican Senator Lisa Murkowski threw her support behind Tillis’ plan to block Trump’s Fed nominees in response to news about Powell’s criminal investigation. Like Cramer, Tillis is also a member of the Senate Banking Committee.
Congressional reactions pointed to yet another possible rift between the Trump administration and Republicans in Congress, who have largely shown loyalty to the president but have diverged from him recently over the release of files on convicted sex offender Jeffrey Epstein, the US attack on Venezuela and health subsidies. Trump said he did not ask the Justice Department to take action against Powell.
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The Fed chair called the measure a ‘pretext’ to gain more influence over setting interest rates. The indictment threat is the latest in Trump’s effort to pressure the Fed to drastically cut rates.
News of the investigation took gold to a new high this Monday, with the dollar losing its value. The S&P 500 index opened lower but was largely unchanged in afternoon trading.
