Following Federal Reserve Chair Jerome Powell's accusation that the Justice Department initiated a grand jury investigation to pressure the central bank, former President Trump immediately faced a bipartisan backlash, with his plan to nominate a new Fed Chair encountering major obstacles.
According to a Bloomberg report on Monday, Republican Senator Thom Tillis, a key member of the Banking Committee, issued a statement on Sunday explicitly stating he would oppose any Fed nominee put forward by Trump, including the soon-to-be-vacant Chair position, until the matter of the Justice Department investigation is fully resolved. Tillis also serves on the Judiciary Committee, which grants him oversight authority over the Justice Department.
In written and video statements released Sunday evening, Powell indicated that while the investigation is nominally related to his June congressional testimony concerning the renovation of the Fed's headquarters, it "should be understood in the broader context of threats and ongoing pressure from the administration." He warned that the issue at stake is whether the Fed can continue to set interest rate policy based on evidence and economic conditions, or whether it will yield to political pressure and intimidation.
Democratic lawmakers swiftly followed with condemnations. Senior Banking Committee Democrat Elizabeth Warren accused Trump of "abusing the law like a dictator" and called on the Senate to refuse to consider any Fed nominees from Trump. Senate Democratic Leader Chuck Schumer warned that undermining the Fed's independence threatens the economy.
The opposition from Tillis constitutes a substantive obstacle to Trump's plan to reshape the Fed. The Senate Banking Committee currently has a partisan split of 13 to 11, and Tillis's opposing vote would likely deadlock any Fed nominee at the committee level. Under current Senate rules, forcing a controversial nomination out of committee requires 60 votes of support.
In his statement, Tillis said, "If there was any doubt before about whether advisors within the Trump administration are actively pushing to end Fed independence, there should be none now. What is now in question is the independence and credibility of the Justice Department." The Republican senator, who is not running for re-election, took a hardline stance, showing he is unconstrained by electoral pressures.
According to an NBC report, Trump denied knowledge of the Justice Department's investigation into the central bank during an interview. However, Powell explicitly stated that this move should be linked to the administration's threats and ongoing pressure, framing it as a question of whether the Fed can continue to set rates based on economic conditions or will be swayed by political pressure and intimidation.
Trump has for months been explicit about his desire for the Fed to cut interest rates quickly and significantly. Multiple parts of his administration have launched attacks against current Fed governors, including Biden appointee Lisa Cook and incumbent Chair Powell.
The Justice Department investigation nominally targets issues related to Powell's June congressional testimony about the Fed headquarters renovation project. However, Powell's statement clearly characterized the investigation as a tool of political pressure, rather than a normal legal proceeding.
Florida Republican Representative Anna Paulina Luna, who had previously called for an investigation into Powell's congressional statements about the renovation project, cheered the investigation on social media platform X, writing, "Unelected bureaucrats do not get immunity."
Tillis's swift counterattack comes as Trump recently suffered a series of defections from Republican lawmakers in Congress. Last week, the House voted to extend healthcare subsidies from the Biden era, while the Senate advanced legislation to terminate military operations in Venezuela.
According to a report by NBC News cited by Huanqiu.com, hours after the Senate voted to advance a draft resolution condemning current and future White House actions in Venezuela, Trump "angrily" called five Republican senators who voted in favor. These five included Rand Paul, Josh Hawley, Lisa Murkowski, Susan Collins, and Todd Young. Sources familiar with the matter revealed that Trump threatened the senators with primary challenges, saying he would "take them down."
On the 8th, the Senate passed a procedural vote with 52 in favor and 47 opposed, advancing a bipartisan draft resolution to restrict Trump from taking military action in Venezuela without congressional authorization. A formal Senate vote is expected this week.
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