WASHINGTON, Jan 12 (Reuters) – U.S. Senate Republicans expressed concern on Monday about the Trump administration’s threat to indict Federal Reserve Chair Jerome Powell, as two lawmakers threatened to retaliate by blocking President Donald Trump’s central bank nominees and a third called for the federal probe to end quickly.
At issue, the senators said, was confidence in the Fed, 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.
Senator Thom Tillis 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.
“Jerome Powell is a bad Fed Chair who has been elusive with Congress, especially regarding the overruns of the elaborate renovations of the building,” 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, 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.”
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. Like Cramer, Tillis is also a member of the Senate Banking Committee.
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.
The Fed chief called the move a “pretext” to gain more influence over the setting of interest rates. The indictment threat is the latest in Trump’s effort to push the Fed to dramatically lower rates.
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 largely unchanged in afternoon trading.
(Reporting by David Morgan; Editing by Nia Williams and Paul Simao)
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