President Donald Trump has spent his second term bulldozing elected and appointed officials who resist him or refuse to comply with his demands. But he may have met his match in Federal Reserve Chairman Jerome Powell.
As the Trump administration steps up its pressure campaign against the central bank — now including Justice Department subpoenas and the threat of criminal charges — Senate Republicans have closed ranks around Powell, defending an independent Fed chair under attack by a president of their own party.
“I know Chairman Powell very well. I will be stunned — I will be shocked — if he has done anything wrong,” said Republican Sen. John Kennedy of Louisiana, one of Trump’s most trusted allies in the Senate.
Shortly after the Justice Department subpoenaed the Fed, Powell went on the offensive, releasing a video statement accusing the administration of using “pretexts” to pressure the central bank into sharply lowering interest rates, as Trump demanded. The 72-year-old Fed chairman also leaned on the relationships he has cultivated on Capitol Hill since his appointment in 2018, holding several calls with Republican senators in the days after the video’s release.
“He knows Congress well,” said Robert Tetlow, a former senior policy adviser at the Fed. “He gets in there, pets the dog, shoots the breeze and has a way of endearing himself to people, and he’s really good at it.”
For some in Congress, it’s personal
At a hearing in March 2024, Powell received an unusual greeting from a member of the Senate Banking Committee: The office dog said hello.
“Gus sends his regards,” said Sen. Thom Tillis, Republican of North Carolina. “If you have time after the hearing, you should come see him.”
“I don’t want to disrupt his nap,” Powell said with a laugh in the courtroom.
Now, Tillis – who will retire at the end of this year – is among the Republicans rushing to Powell’s defense, vowing to refuse to support any Trump administration nominee for the Federal Reserve until the legal limbo surrounding the presidency is resolved.
Alaska Sen. Lisa Murkowski threw her support behind Tillis’ plan to block the nominees. She was among several Republican senators who said they spoke with Powell after his video statement.
“I view the situation with Jay Powell and this so-called investigation into the redesign of their offices there as a reason to do nothing other than intimidate, threaten and coerce,” Murkowski told reporters. Powell goes by “Jay” informally.
Murkowski and Tillis have not been shy about criticizing the Trump administration in recent months. What makes Powell’s reaction unique is that even Trump’s trusted allies — and opponents of the Fed’s recent decisions — rushed to the Fed chair’s side.
“I strongly believe in an independent Federal Reserve,” said Pennsylvania Sen. Dave McCormick, who also serves on the Senate Banking Committee. The first-term senator added that he “agrees with President Trump that Chairman Powell has been slow to reduce interest rates” but said he does not “believe Chairman Powell is guilty of criminal activity.”
Senate Majority Leader John Thune, R-S.D., said the investigation “better be real” and “better be serious.”
In the House, Financial Services Chairman French Hill criticized the Justice Department’s investigation.
“I know that Mr. Powell is a man of integrity, strongly committed to public service,” he said. “Although over the years we had political disagreements, I found him direct, frank and possessed of the highest integrity. »
Decades of Service to Washington
Hill also said in his statement that he “has known Chairman Powell since we worked together at Treasury during the George HW Bush administration.”
Powell, a Republican, has been a fixture in the nation’s capital for decades, where he developed a reputation as a centrist. He worked at the Bipartisan Policy Center, a think tank, from 2010 to 2012 and pushed congressional Republicans toward compromise during their budget battles with President Barack Obama.
Obama, in turn, appointed Powell to the Fed board in 2012. Trump then elevated him to chair in 2018. He was reappointed by President Joe Biden in 2022.
Powell also built credibility with Republicans in the House and Senate by largely ignoring personal attacks from Trump during the president’s first term, when he complained about Powell’s rate hikes in 2018. Generally speaking, Powell has tried to keep his head down and avoid back-and-forth with the White House. A strong economy — at least until the COVID pandemic hit — also helped protect the Fed during Trump’s first term.
Powell has often cited support from the Capitol as a counterweight to Trump’s attacks. At a press conference last July, Powell spoke of the importance of moving the Fed away from “direct political control” because it allows the central bank to take unpopular actions such as raising interest rates to thwart inflation.
“I think it’s pretty widely understood,” he said. “Certainly, it’s in Congress.”
Powell’s public agenda underscores his commitment to staying connected with Congress. In the month after Trump’s inauguration last year, he met or spoke by phone with 27 senators from both parties, depending on his schedule.
After testifying before the Senate Banking Committee about the Fed building renovation in June of last year, Powell contacted Chairman Tim Scott and Democratic Senator Elizabeth Warren about the cost of the project.
“As would be expected when undertaking a major renovation of historic buildings nearly 100 years old, Council’s designs continued to evolve over the course of the project,” Powell wrote.
The accusations against Powell
The subpoenas to the Fed relate to Powell’s comments on the $2.5 billion renovation of two office buildings, which Trump called excessive.
“The threat of criminal prosecution 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 president’s preferences,” Powell said in a video statement.
Trump insisted he was unaware of the Powell investigation. Asked by CBS News whether the subpoenas were a form of retaliation, Trump responded Tuesday: “I can’t help but know what that looks like.” »
Trump has lashed out at several officials he sees as having wronged him, including by attempting to fire another Fed board member, Lisa Cook. The Supreme Court allowed Cook to keep his job and will hold a hearing on his case on Wednesday.
But not all of Trump’s efforts are paying off, as federal investigations against former FBI Director James Comey and New York Attorney General Letitia James have been dismissed by the courts.
“So far it appears to be a misstep by the administration,” said Lev Menand, a law professor at Columbia University and author of a book on the Fed. “This attempt to pursue Jay Powell with a possible criminal charge is met with significant resistance from elected officials, even within the Republican Party.”
