Powell investigation: Drumbeat of Republican opposition grows on Capitol Hill

• Sen. Tillis's blocking threat poses a major obstacle for Trump on the Senate Banking Committee, where Republicans hold only a 13-11 majority, meaning one GOP defection can deadlock nominee confirmations
• Multiple Republicans including Sen. Murkowski and House Financial Services Chair French Hill criticized the investigation as 'coercion' and an 'unnecessary distraction' that could undermine Fed independence and market stability
• Powell's term as Fed chair ends in May 2026, but he could remain as a Fed governor until 2028, complicating Trump's long-stated goal of replacing him with an ally

Summary

Key Development: The Justice Department has opened a criminal investigation into Federal Reserve Chair Jerome Powell regarding his handling of renovations at the Fed's headquarters and related congressional testimony. Powell disclosed this on Sunday, characterizing it as an attempt to intimidate him over his measured approach to interest rate cuts, which runs counter to President Trump's preferences.

Political Opposition: Bipartisan resistance is mounting on Capitol Hill, with notable Republican pushback threatening Trump's plans to replace Powell when his term expires in May 2026. Senator Thom Tillis (R-NC) is blocking any Fed nominee until the investigation is resolved—a significant obstacle given the Banking Committee's 13-12 Republican majority, where one defection creates a deadlock.

Key Republican Voices

• Sen. Lisa Murkowski (R-AK) called the investigation "nothing more than an attempt at coercion" and demanded a congressional probe into the Justice Department
• Rep. French Hill (R-AR), House Financial Services Chair, said the charges create "unnecessary distraction"
• Sen. Kevin Cramer (R-ND), though a Powell critic, stated "I do not believe however, he is a criminal"
• Sen. Cynthia Lummis (R-WY) stands as Trump's lone ally, supporting the investigation

Market Implications: The controversy threatens Federal Reserve independence at a critical economic juncture. Republicans warn that undermining the Fed's autonomy could destabilize markets and the broader economy. Powell could remain as a Fed governor until 2028 even after his chair term expires, further complicating Trump's replacement strategy.