Republicans split as Trump’s Fed pressure sparks rare rebellion

A senior Republican senator has joined a growing pushback against President Donald Trump’s escalating pressure on the US Federal Reserve, warning that the administration’s threat to indict Fed Chair Jerome Powell risks undermining the country’s economic foundations.

Alaska Senator Lisa Murkowski said on Monday she backs fellow Republican Thom Tillis’s plan to block Trump’s nominees to the Federal Reserve, following reports that the Justice Department is weighing criminal charges against Powell.

“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,” Murkowski wrote on X.

Murkowski is one of a small number of Republicans willing to break with Trump, whose party holds a 53–47 majority in the Senate. Her intervention underscores growing unease within the party over the president’s increasingly overt efforts to bend monetary policy to his political will.

Since returning to office last year, Trump has repeatedly and publicly demanded faster interest rate cuts, defying long-standing norms designed to shield the central bank from political pressure and allow it to act on economic data alone.

Murkowski said she spoke earlier on Monday with Powell, who revealed on Sunday that the Fed had received subpoenas from the Justice Department. Powell described the investigation as based on “pretexts”, aimed at punishing the central bank for setting interest rates “based on our best assessment of what will serve the public”, rather than on Trump’s preferences.

Calling the threat of prosecution “nothing more than an attempt at coercion”, Murkowski said Congress should scrutinise the Justice Department itself if concerns about renovation cost overruns at the Fed’s headquarters were genuine. Such overruns, she added, were “not unusual”.

Powell’s term as Fed chair expires in May, and White House economic adviser Kevin Hassett has been widely seen as a possible successor. Hassett weighed in on Monday by questioning Powell’s congressional testimony related to the refurbishment project, which sits at the centre of the Justice Department’s probe.

“Right now, we’ve got a building that’s got like, dramatic cost overruns and plans for the buildings that look inconsistent with the testimony, but again, I’m not a Justice Department person. I hope everything turns out OK for Jay,” Hassett told CNBC’s Squawk Box.

Later, Hassett said he would support the investigation if he were leading the Fed, telling reporters it “seems like the Justice Department has decided that they want to see what’s going on over there with this building that’s massively more expensive than any building in the history of Washington”.

Trump has made little effort to hide his frustration with Powell. In December, he wrote on Truth Social:

“The United States should be rewarded for SUCCESS, not brought down by it. Anybody that disagrees with me will never be the Fed Chairman!”

The administration’s approach has triggered an unusually forceful response from former central bankers. On Monday, the past three Fed chairs, Janet Yellen, Ben Bernanke and Alan Greenspan, joined 10 other former senior economic officials in condemning the criminal probe.

“The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence,” the group said in a joint statement.

“This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly. It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.”