By Lindsay Wise, Siobhan Hughes and Anvee Bhutani

WASHINGTON -- Senate Republicans criticized the Justice Department's investigation of Federal Reserve Chair Jerome Powell, with some calling the probe overtly political and warning it could backfire by rattling markets and potentially holding up the confirmation of his successor.

Senate Majority Leader John Thune (R., S.D.) said he hadn't seen the allegations against Powell, but "they better be real and they better be serious." Thune said the issue "needs to be resolved quickly because the Fed's role and the Fed's independence in shaping monetary policy in the country is something we need to ensure proceeds without political interference."

The comments from across the GOP caucus marked a prominent public break with the Republican administration, with many seeing preserving the Fed's independence as a line in the sand. Several GOP lawmakers said they had spoken with Powell and praised his integrity, while urging the Justice Department to reverse course. Others were critical of Powell's performance in office but doubted he had done anything illegal.

"It better not be a political reason for the investigation," said Sen. Chuck Grassley (R., Iowa), chair of the Senate Judiciary Committee, who said he supports the independence of the Fed.

"It seems like we're in too much of a food fight," said Sen. Jim Justice (R., W.Va.).

Sen. John Kennedy (R., La.), a member of the Senate Banking Committee that would hold hearings on the next Fed chief, said he has known Powell a long time and "would be stunned to find out he had done anything wrong." He cautioned against what he called a "pissing match" between the Fed and the executive branch that he said could worry investors and push interest rates higher.

U.S. prosecutors have opened an unprecedented investigation into Powell over his testimony to Congress last summer about costs for the central bank's building-renovation project. The Fed received grand jury subpoenas from the Justice Department on Friday that threaten a criminal indictment. Powell, whose term as chair ends in May, on Sunday accused the Trump administration of using the threat of criminal prosecution to pressure the Fed into lowering rates.

The fight could hinder Trump's ability to confirm Powell's eventual successor in the Senate, which Republicans control 53-47. Sen. Thom Tillis (R., N.C.), said Sunday he would block any Fed nominee until the investigation is resolved. Tillis, like Kennedy, serves on the Senate Banking Committee, which has 13 Republicans and 11 Democrats. If he voted against a nomination, it would deadlock in committee.

"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," Tillis said.

Sen. Lisa Murkowski (R., Alaska), a frequent Trump critic, said that she had spoken with Powell and agreed with Tillis, calling the investigation "grounds to do nothing but intimidate, threaten, and coerce." She said the stakes "are too high to look the other way: if the Federal Reserve loses its independence, the stability of our markets and the broader economy will suffer."

Democrats said the probe showed how Trump was weaponizing the Justice Department.

"Anyone with two eyes and half a brain knows exactly what this criminal probe represents: a brazen attempt by Donald Trump to cannibalize the Fed's independence," said Senate Minority Leader Chuck Schumer (D., N.Y.).

Even Republicans who criticized Powell's performance stressed they didn't believe the Fed chair had committed any crimes.

"I would hope Jerome Powell is adult and smart enough to know that the best thing he can do for the good of the Fed is to step down earlier than his term," said Sen. Kevin Cramer (R., N.D.), a Trump ally who serves on the banking committee. Still, Cramer said that he didn't think that the Fed chair's actions were criminal.

"If we were going to do an indictment on everybody that's elusive in front of Congress, we'd have to build a couple of new penitentiaries," Cramer joked.

Sen. Cynthia Lummis (R., Wyo.), also a banking panel member, said Powell "was very ill-prepared for the testimony he gave last summer, and he made some misstatements." But, she said she didn't think they rose to the level of intentionally misleading Congress. "That's a heavy lift," she said.

Sen. Dave McCormick (R., Pa.), another member of the banking committee, said that the Fed building renovation might have wasted taxpayer dollars, but the proper place to address that question is through congressional oversight. "I do not think Chairman Powell is guilty of criminal activity," McCormick said.

A spokesman for Attorney General Pam Bondi declined to comment on the probe Sunday but said she "has instructed her U.S. attorneys to prioritize investigating any abuses of taxpayer dollars." Trump told NBC News on Sunday that he didn't know about the Justice Department subpoenas and that any investigation wouldn't be related to disagreements the White House has had with Powell over interest rates.

It isn't clear what would happen if a new Fed chair isn't confirmed when Powell's current term expires on May 15. On four occasions since 1935, when Congress adopted the Fed's current structure, the chair's four-year term expired and created a vacancy that wasn't filled within days. Each time, the incumbent Fed chair was designated as "chair pro tempore" and continued to serve.

In 2022, Powell was selected by the Fed's board as the "chair pro tempore" while awaiting confirmation to a second term as Fed chair, as did former Chairman Alan Greenspan while awaiting confirmation to a third term in 1996.

There have only been two instances when the president nominated a new chair who wasn't immediately confirmed by the Senate after the incumbent chair's term ended. In both instances -- in 1948 and in 1978 -- the outgoing Fed chair also served as the "chair pro tempore" for several months or weeks until the new chair was confirmed.

Write to Lindsay Wise at lindsay.wise@wsj.com, Siobhan Hughes at Siobhan.hughes@wsj.com and Anvee Bhutani at anvee.bhutani@wsj.com

(END) Dow Jones Newswires

January 12, 2026 20:25 ET (01:25 GMT)

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