2 prominent Republican senators challenge Fed nominations after DOJ issues warnings to Powell

Republican Senators Respond to DOJ Investigation of Fed Chair Powell

Senators Thom Tillis of North Carolina and Lisa Murkowski of Alaska swiftly addressed whether any Republicans would challenge the Justice Department’s criminal investigation into Federal Reserve Chair Jerome Powell.

On Sunday evening, Tillis released a public statement declaring his intention to block all of former President Trump’s Federal Reserve nominees until the legal proceedings are resolved.

“I will not support the confirmation of any candidate for the Federal Reserve—including the upcoming vacancy for Chair—until this legal issue is settled,” wrote Tillis, who is set to retire from the Senate.

The following day, Murkowski issued her own remarks, sharing that she had spoken with Powell that morning. She described the administration’s investigation as “an act of intimidation” and agreed with Tillis’s decision to halt Fed nominations until the matter is concluded.

Tillis’s position carries extra weight since he serves on the Senate Banking Committee, which is responsible for vetting and voting on Federal Reserve appointments.

The committee currently consists of 13 Republicans and 11 Democrats. If Tillis maintains his opposition and Democrats uniformly reject Trump’s nominees, the result would be a 12-12 split. While this would not necessarily prevent a nominee from advancing to a full Senate vote, it would complicate the confirmation process.

Tobin Marcus, head of US policy and politics at Wolfe Research, explained to clients that although Trump supporters could attempt to override a deadlock led by Tillis, it would require significant procedural maneuvering, such as circumventing the filibuster. This means that even as a single moderate, Tillis could pose a credible threat to Trump’s nominees.

Murkowski has previously demonstrated her willingness to oppose Trump. In September, she joined Democrats in voting against Stephen Miran’s short-term Fed nomination.

Wolfe Research also noted that other Republicans might join the resistance against Trump’s picks, describing the Justice Department’s move as “somewhat self-defeating.”

Strong Reactions on Capitol Hill

Alongside Tillis, Democrats on the Senate Banking Committee are expected to uniformly oppose any future Trump nominees for the central bank.

Senator Elizabeth Warren, the committee’s leading Democrat, stated on Monday that “the Committee and the Senate should not proceed with any Trump nominee for the Fed, including the Chair position.”

Other Democratic members echoed this sentiment. Senator Mark Warner of Virginia warned that prosecuting Powell “jeopardizes the financial security of millions of Americans.”

It remains uncertain whether Tillis and Murkowski can rally enough Republican colleagues to join Democrats in blocking Trump’s nominees. Four Republican votes against, combined with unanimous Democratic opposition, would be needed to defeat a nominee on the Senate floor.

On Monday, Senator Kevin Cramer, another Republican on the committee, criticized both Powell and the Trump administration’s actions. In a statement to Yahoo Finance, Cramer called Powell “an ineffective Fed chair who has been evasive with Congress,” but added, “I do not believe, however, that he is a criminal,” expressing hope that the investigation would soon be resolved.

This potential standoff comes as Senate Republicans have increasingly shown a willingness to challenge Trump. Most recently, five Republicans—including Murkowski, Susan Collins, Rand Paul, Josh Hawley, and Todd Young—joined Democrats to pass a measure limiting Trump’s war powers regarding Venezuela.

Trump responded by posting that these Republicans “should never be elected to office again.”

Debate Over Federal Reserve Independence

The confrontation between Trump and Senate Republicans appears poised for escalation. Tillis’s vow could soon be tested with the upcoming decision on a permanent Fed governor to replace Miran, whose term ends January 31.

The issue may become even more pressing in the spring, as Trump’s team seeks to nominate and confirm a new Fed Chair.

Trump, for his part, claimed on Sunday that he was unaware of the Justice Department’s investigation, but criticized Powell in an interview with NBC News, saying, “he’s certainly not very good at the Fed” and repeating his view that “interest rates are much too high.”

Tillis, meanwhile, indicated that he wants to see a significant change in Trump’s approach to the central bank before supporting any nominee. He stated, “If there was any lingering doubt that Trump Administration advisers are actively working to undermine the Federal Reserve’s independence, there should be none now.”

Murkowski added that Congress should consider investigating Trump’s own law enforcement officials if the Justice Department believes an inquiry into Powell is justified due to project cost overruns, which she noted are not uncommon.

“The consequences are too serious to ignore,” she said. “If the Federal Reserve’s independence is compromised, both market stability and the broader economy will be at risk.”

Ben Werschkul reports from Washington for Yahoo Finance.