Republican Senators Thom Tillis of North Carolina and Lisa Murkowski of Alaska delivered a stunning rebuke to their own party's administration Monday, announcing they would block any Federal Reserve nominees in response to the Department of Justice's criminal investigation into Fed Chair Jerome Powell.

The defections from two members of the Senate Banking Committee—which must approve all Fed nominees—create a potentially fatal roadblock for President Trump's plans to install new leadership at America's central bank.

Tillis Draws a Line

"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," Senator Tillis said in a statement that landed like a thunderclap in Washington. "It is now the independence and credibility of the Department of Justice that are in question."

Tillis, a reliable conservative vote on most issues, made clear his opposition would extend to any nominee until the investigation is resolved. Given that the Banking Committee has just 13 Republicans and 11 Democrats, even a single Republican defection makes confirmation mathematically impossible without Democratic support.

Murkowski Joins the Revolt

Senator Murkowski went even further, publicly disclosing that she had spoken directly with Chair Powell on Monday and concluded the investigation was illegitimate.

"It's clear the administration's investigation is nothing more than an attempt at coercion," Murkowski stated. "If the Department of Justice believes an investigation into Chair Powell is warranted based on project cost overruns—which are not unusual—then Congress needs to investigate the Department of Justice."

The Alaska senator, known for her independent streak, explicitly backed Tillis's position, creating a united front that will be difficult for the administration to breach.

A Third Voice of Concern

Even Republican senators who have been critical of Powell's policies expressed discomfort with the investigation. Senator Kevin Cramer of North Dakota, also a Banking Committee member, offered a nuanced critique that captured the sentiment of many in the GOP caucus.

"I believe Powell is a bad Fed Chair who has been elusive with Congress," Cramer acknowledged. "I do not believe, however, he is a criminal. I hope this criminal investigation can be put to rest quickly along with the remainder of Jerome Powell's term. We need to restore confidence in the Fed."

House Republicans Also Push Back

The concerns extended beyond the Senate. House Financial Services Committee Chair French Hill, Republican of Arkansas, defended Powell as "a person of the highest integrity" and warned that the subpoenas "could undermine this and future Administrations' ability to make sound monetary policy decisions."

Hill's statement was notable because it acknowledged the precedent being set—if one administration can use criminal investigations to pressure the Fed, future administrations of either party could do the same.

What This Means for Fed Leadership

Powell's term as Fed chair expires in May, and the administration had been expected to announce a nominee as early as this month. Kevin Hassett, currently a White House economic advisor, and Kevin Warsh, a former Fed governor, have been widely reported as the leading candidates.

But with Tillis and Murkowski now pledging opposition, any nominee would face an uphill battle. The administration would need to either:

  • Convince at least two Democrats to support a nominee—highly unlikely given the current political climate
  • Persuade Tillis and Murkowski to reverse their positions—possible only if the DOJ investigation is dropped
  • Wait for Powell's term to expire and leave the position vacant—a scenario that would create its own market turmoil

The Political Calculation

For Tillis and Murkowski, the political calculation may be complex. Both have faced criticism from the Trump wing of the party in the past, and this stance could invite primary challenges. But both also represent states with significant business communities that value economic stability and Fed independence.

"The Federal Reserve's independence isn't a partisan issue—it's an American issue. Markets around the world look to our central bank as a model of institutional integrity."

— House Financial Services Committee Chair French Hill (R-AR)

Market Reaction

Ironically, the Republican pushback may have helped stabilize markets Monday. After opening sharply lower on the news of the Powell investigation, stocks recovered throughout the day as it became clear that the administration's path to reshaping the Fed faces significant obstacles.

The message to markets: even in an era of intense partisan division, some institutional guardrails remain intact.

Looking Ahead

The standoff creates an unusual situation where the administration may be forced to negotiate with its own party members over the fundamental question of central bank independence. Tillis's statement suggested a path forward: drop the investigation, and normal confirmation processes can resume.

Whether the administration takes that off-ramp or escalates the confrontation will likely determine the trajectory of monetary policy—and market confidence—for months to come.