Senate Banking Committee Chair Tim Scott has openly expressed his belief that Federal Reserve Chair Jerome Powell did not commit any criminal acts during his Congressional testimony last year concerning the Federal Reserve's headquarters renovations. In an interview on Fox Business, Scott, who personally questioned Powell during the hearing, detailed his perspective on the matter.

“I was the one asking the questions,” Scott explained. “Jay Powell was responding to me. Obviously, he and I have very, very strong disagreements on many issues, everyone.”

Despite his critique of Powell's performance, Scott emphasized that incompetence should not be mistaken for criminal activity. “I believe what he did was made a gross error in judgment,” he said. “He was not prepared for that hearing. I do not believe that he committed a crime during the hearing.”

The controversy surrounding Powell intensified after the Justice Department issued subpoenas to the Fed last month, investigating his statements to Congress. Powell responded with an unprecedented video message, accusing the administration of attempting to use the probe as leverage to influence monetary policy—a claim that has sparked concerns about the independence of the Fed. Senator Thom Tillis (R-N.C.) has since withheld his support for any Fed nominees until the investigation is resolved, signaling the high stakes involved in the situation.

Scott also touched upon the future leadership of the Federal Reserve, suggesting a shift might be necessary. “It was time for a new head of the central bank,” Scott remarked, criticizing Powell as “inept.” He further hinted that resolution was on the horizon, suggesting, “Thom Tillis will be voting for Kevin Warsh as the next chairman of the Federal Reserve.” Tillis has praised Warsh but maintained that his stance on the DOJ investigation remains unchanged.

The statements from Scott mark a significant moment as he has not previously spoken in-depth about the administration’s investigation into Powell. His comments not only defend Powell from criminal accusations but also highlight a growing rift over the Federal Reserve's future direction and leadership. As the situation unfolds, the financial community and policymakers alike are keenly watching the implications for the central bank's autonomy and its impact on global economic policy.