Kevin Warsh, nominee for chair of the Federal Reserve. Photo: Yonhap News New York (Financial News) —A senior Republican in the U.S. Senate has publicly pushed back against the Department of Justice investigation into Federal Reserve (Fed) Chair Jerome Powell.
Senator Tim Scott, a Republican who chairs the Senate Banking Committee, said in an interview with Fox Business on the 4th (local time), "You can think Chair Powell has not done his job properly, but incompetence or poor judgment is not a criminal act."
Scott said Powell had been poorly prepared and made a serious error in judgment at a congressional hearing last year regarding the surge in the cost of remodeling Federal Reserve headquarters. However, he stressed, "I do not believe he committed a crime during the hearing process."
The investigation was triggered after the cost of remodeling the Fed’s headquarters ballooned to 2.5 billion dollars, 700 million dollars over the original plan. The Department of Justice is examining whether Powell distorted or misrepresented the facts about this issue during a Senate hearing. But with even Republican leaders now saying publicly that this is "not a crime," political resistance to the legitimacy of the probe is growing.
The DOJ investigation is also directly affecting the confirmation process for Kevin Warsh, the former Fed governor nominated by President Donald Trump to be the next Fed chair. Within the Republican Party, Senator Thom Tillis of North Carolina has openly moved to block the process, saying, "Until the Department of Justice’s investigation into Chair Powell is completed fully and transparently, I will oppose confirming a Fed chair."
Senator Kevin Cramer, another Republican on the Senate Banking Committee, likewise said he does not believe "Powell is a criminal" and expressed hope that the investigation will be closed. "If misleading Congress is a crime, we would have to build a new federal prison," Cramer said, adding, "Powell did make a mistake, but it does not rise to the level of a crime."
Meanwhile, President Trump, in an interview with NBC News the same day, treated it as a given that interest rates would be cut if Warsh becomes Fed chair.
Trump said, "I think he understands my intention to cut interest rates," and added, "If he had said he was going to raise rates, he never would have gotten the job in the first place."
pride@fnnews.com Reporter Lee Byung-chul Reporter
