Republican Sen. Thom Tillis of North Carolina said Sunday that he will block any of President Trump’s candidates for the Federal Reserve following news of the Justice Department’s criminal investigation into Fed Chair Jerome Powell.
Tillis’ new stance could throw a monkey wrench into approval for any of Trump’s picks to lead the Fed or replace potential retirees — the Senate Banking Committee, which has 13 Republicans including Tillis plus 11 Democrats, must approve all central bank nominees.
“If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question,” Tillis said in a Sunday statement.
“I will oppose the confirmation of any nominee for the Fed – including the upcoming Fed Chair vacancy – until this legal matter is fully resolved,” added the senator, who is retiring.
Powell’s term as chairman expires in May. It’s possible he could stay on as a Fed governor through 2028, though he has declined to comment on whether he will remain on the board.
Powell confirmed Sunday that federal prosecutors have launched a criminal investigation into him related to the Fed’s renovation of its Washington, DC, headquarters – after months of Trump bashing the chairman as “Too Late Powell” for not slashing interest rates quickly enough.
“No one – certainly not the chair of the Federal Reserve – is above the law. But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said in a Sunday statement.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” he added.
Democratic Sen. Elizabeth Warren of Massachusetts echoed Tillis’ comments, accusing Trump of wanting to install a “sock puppet” to lead the central bank.
“Trump is abusing the authorities of the Department of Justice like a wannabe dictator so the Fed serves his interests, along with his billionaire friends,” said Warren, who years earlier called Powell a “dangerous man.”
“This Committee and the Senate should not move forward with any Trump nominee for the Fed, including Fed Chair.”
Amid Trump’s broadsides against Powell, the White House has pressured Fed Governor Lisa Cook to step down, accusing her of mortgage fraud. Cook called those allegations “baseless.”
Stephen Miran – Trump’s economic adviser who stepped into a seat vacated by Adriana Kugler – will see his term expire in January. There are also rumors about potential retirements from the board, such as Vice Chair Philip Jefferson.
National Economic Council Director Kevin Hassett and former Fed governor Kevin Warsh are reportedly in the lead in the race to chair the Federal Reserve. BlackRock exec Rick Rieder and Fed governor Christopher Waller have also been interviewed for the position.
Prosecutors are investigating Powell over his testimony last summer about the central bank’s renovations.
During an interview with NBC News on Sunday, Trump denied any involvement in the criminal probe.
“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” he said.
“What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got,” the president added.
In December, Trump threatened to sue Powell for “gross incompetence,” adding that he’d love to fire him for not slashing rates at a fast enough pace.
During an unrelated press conference with Israeli Prime Minister Benjamin Netanyahu, the president fumed at the ballooning costs of Powell’s multi-year renovation of Fed headquarters near the National Mall.
“It’s going to end up costing more than $4 billion – $4 billion!” Trump said. “Highest price of construction per square foot in the history of the world.”
Last summer, Trump said he wouldn’t fire Powell after the pair donned matching hard hats and toured the central bank’s building renovation project, the cost of which has jumped from $1.9 billion to $2.5 billion so far.
On its website, the Fed attributed spending increases to unforeseen costs, like unexpected costs of materials and labor, more asbestos than anticipated and toxic contamination in the soil.
But the project will “reduce costs over time by allowing the Board to consolidate most of its operations,” according to the website.
After their tour of the renovation site in July, Trump took questions from the press while Powell stood nearby.
At one point, the president said the costs of the renovation were much higher than the latest price tag showed, but Powell quickly jumped in, saying Trump had included costs from a project completed years earlier.
