As Senate Democrats took on the Department of Justice probe of Federal Reserve Chair Jerome Powell, the White House mounted another broadside against him — this time about his future tenure at the central bank.
Sens. Elizabeth Warrenof Massachusetts and Dick Durbinof Illinois sent letters to two Trump officials demanding documents and records related to the criminal probe, the first congressional response to the subpoenas sent to Powell earlier this month, The Wall Street Journal reported Jan. 22.
Meanwhile, President Donald Trump suggested in CNBC interview Jan. 21 that Powell would not enjoy his time if he stayed on the Fed’s Board of Governors after his term as chair expired in May.
Trump warned that Powell wouldn’t be “very happy’’ if he continued to stay at the Fed until his term as governor ends in 2028.
As Senate Democrats took on the Department of Justice probe of Federal Reserve Chair Jerome Powell, the White House mounted another broadside against him — this time about his future tenure at the central bank.
Powell links DOJ probe to interest-rate cuts
Powell said Jan. 11 that the DOJ served the Fed with grand jury subpoenas on Jan. 9, threatening a criminal indictment related to his testimony before the Senate Banking Committee in June 2025 on the $2.5 billion cost of renovations at the Fed headquarters.
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“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation,’’ Powell said in a statement.
The subpoenas raised global concerns from economists, Fed watchers and market analysts about the repercussions from the attempted politicization of the central bank’s independence.
Trump escalates demands for lower interest rates
Trump has been highly critical of the Fed chair and the Federal Open Market Committee for not dropping the benchmark Federal Funds Rate to 1% or lower.
The funds rate, which covers short-term borrowing like credit cards and auto loans, currently is 3.50% to 3.75% and traders do not expect a rate cut when the FOMC meets Jan. 28.
The president is expected to announce his nominee to place Powell soon.
Trump has said the candidate would be expected to adhere to his monetary policy demands.
Senate Democrats send letters to Bondi, Pulti
The senators sent letters to Attorney General Pam Bondi and to Bill Pulte, the director of the Federal Housing Finance Agency.
Pulti, a longtime Trump loyalist, has taken an active role in the White House’s efforts to gain leverage over the central bank including issuing allegations of mortgage fraud against Fed Governor Lisa Cook.
Powell and Cook both said the Trump administration’s actions were a “pretext” to influence the central bank to drastically lower interest rates per Trump’s year-long demands.
Senators call DOJ probe ‘serious’
Warren and Durbin wrote in their letter to Pulte that “The investigation appears to be a serious misuse of power.”
- Pulte has said that he didn’t know anything about it. An FHFA spokesman said Jan. 22 that the DOJ is outside of Pulte’s purview.
- A DOJ spokeswoman declined to comment. The White House didn’t immediately respond to a request for comment from The Journal.
The senators are requesting documents about how the investigation came together, including any coordination between the DOJ, the White House, the FHFA and other agencies.
Related: Supreme Court signals Fed independence in Cook firing lawsuit
The Democrats’ demands could lay the groundwork for a future formal investigation.
In their letters dated Jan. 20, Warren and Durbin also tied the Powell investigation to a broader pressure campaign by the White House to sway the Fed’s deliberations.
They drew a link between the probe into Powell’s testimony and the investigation into Cook’s home mortgages — she has never been charged or convicted — that led Trump to fire her in August.
The Supreme Court appeared skeptical of the firing during an emergency hearing Jan. 21, and will release a decision later this year.
Cook remains on the job per the order of a lower court federal judge.
GOP senators voice concerns against DOJ Fed probe
No Senate Republicans joined Warren and Durbin’s letter, but some have expressed their own concerns about the Powell investigation.
Sen. Thom Tillis of North Carolina, a Republican member of the banking committee, said he would oppose any Trump nominee to the Fed until the investigation is concluded.
Republican Sen. Lisa Murkowski of Alaska suggested that Congress should itself investigate the Justice Department over the episode.
Trump issues warning to Powell
Fed chairs historically step down from the central bank when their terms as chair expire.
Powell has not said what his plans are.
If Powell chooses to stay, Trump suggested it would be a difficult tenure.
“We’ll see how it all works out,” Trump said in the CNBC interview from Davos, Switzerland.
When pressed on Powell potentially staying on as a Fed governor until 2028, Trump cautioned that “if that happens, his life won’t be very, very happy, I don’t think.”
Were Powell to remain, he would retain a strong influence on the seven-member Board of Governors and over policymaking decisions.
Trump told CNBC he may have made his pick for the next chair of the Federal Reserve but declined to name the nominee.
Related: White House turns up heat on Powell as Fed chair pick nears