FED UP: As news of the escalation of the Trump administration’s crusade against Federal Reserve Chair Jerome Powell reverberated across Washington and beyond today, it’s President Donald Trump’s GOP that seems more rattled than the markets. The markets early Monday were modestly spooked, WSJ’s Sam Goldfarb and David Uberti write. While U.S. stock indexes initially fell, they started recouping some losses later in the morning. The U.S. dollar weakened, while gold rallied. But there’s still widespread doubt about how far this probe and Trump’s pressure campaign will actually go — and markets have seen brief moments of panic over Trump policies before, so the long-term impact remains unclear. Instead, the Justice Department’s move against Powell has provoked deep criticism from a growing number of Republicans, including members who are crucial votes for any future nominations to the Fed. It’s a sign that the new criminal probe into Powell could become a dividing line for some in the GOP and expose the latest slip in Trump’s iron grip over the party, POLITICO’s Jasper Goodman and Meredith Lee Hill report. Raising eyebrows is Sen. Kevin Cramer (R-N.D.) — a Banking Committee member who is no fan of Powell. He stood by his take that Powell is a “bad Fed chair,” but added: “I do not believe however, he is a criminal.” Cramer said he hoped the probe would be “put to rest quickly along with the remainder of Jerome Powell’s term.” Retiring Sen. Thom Tillis (R-N.C.) kicked off the skeptical responses, mincing no words in a statement last night accusing the Trump administration of “actively pushing” to end the Fed’s independence and weaponizing the DOJ to do it. Tillis, who also sits on the Banking Committee, said he’ll oppose the confirmation of any Fed nominee until the matter is resolved. Stephen Miran, Trump’s temporarily appointed Fed governor, is staring down his term’s expiration on Jan. 31. If the Powell probe drags on, Tillis could join Democrats to block Miran’s reappointment to the board. And it doesn’t stop there: Sen. Lisa Murkowski (R-Alaska) offered one of the sharpest rebukes yet of the Powell investigation, saying she spoke to Powell this morning and calling the investigation “nothing more than an attempt at coercion.” She also backed Tillis’ call to block nominations — complicating the math further with a key swing vote on the Senate floor. “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.” Rep. Mike Lawler (R-N.Y.) joined the concerned chorus this morning, telling Jasper and Meredith that he believes “the independence of the Federal Reserve is paramount and I oppose any effort to pressure them into action.” Rep. French Hill (R-Ark.) — who chairs House Financial Services — in a statement called the investigation an “unnecessary distraction” and noted that Powell is “a man of integrity.” Senate Banking Republicans are expected to meet tonight to discuss big cryptocurrency legislation that the panel wants to advance next week, but members are also expecting Powell to come up, our colleagues report. “There will be a lot of chatter,” one Republican said. Senate Banking Chair Tim Scott, who quizzed Powell on the Fed building renovations in the congressional testimony now said to be under scrutiny, has so far been silent on the matter. The handful of Republicans who have come out against the move against Powell offer the latest example of a party that is increasingly uncomfortable with aspects of Trump’s agenda. Though many of the lawmakers offered rebukes of Powell in their statements, the DOJ action appears to be a red line. The support section: Rep. Anna Paulina Luna (R-Fla.) has taken a victory lap through a series of posts on X. Luna had previously referred Powell for investigation by the DOJ. Sen. Cynthia Lummis (R-Wyo.) also applauded the move, saying that people deserve “answers” but waiting for the DOJ’s findings to comment further. The other side: Democrats are denouncing the investigation en masse. But even more staggering is every living former Fed chair signing onto a letter this morning — joined by a bipartisan group of former Treasury secretaries and top economic leaders — admonishing the move by DOJ, WaPo’s Leo Sands and Andrew Ackerman report. “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,” the group wrote. Powell’s approach to the episode represents a major change, too. Powell is now taking on Trump’s pressure campaign head-on ahead of the expiration of his term in May — a 180 from his previous approach to avoid a direct clash with the president, NYT’s Colby Smith writes. He had already hired D.C. firm Williams & Connolly as outside counsel before the DOJ inquiry was opened, per WSJ. TIMING IS EVERYTHING: “Trump to interview BlackRock's Rick Rieder for Fed chair role,” by Fox Business’ Edward Lawrence: “[Trump] will interview Rick Rieder, BlackRock’s chief investment officer of global fixed income, this week to possibly be the next chairman of the Federal Reserve … The sources said the interview with Rieder will take place on Thursday at the White House.” Good Monday afternoon. Thanks for reading Playbook PM. Drop me a line at abianco@politico.com.
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1. SHE’S IN: Former Rep. Mary Peltola officially entered the race to represent Alaska in the Senate, a big recruiting win for Democrats who have been eyeing Alaska as one of their pick-up opportunities in the Senate, POLITICO’s Elena Schneider reports. Senate Minority Leader Chuck Schumer has been pushing to land Peltola, with the DNC betting that her moderate profile matches up well against incumbent Sen. Dan Sullivan (R-Alaska) through the state’s ranked-choice voting. But this is far from a settled race: Trump ran away with the state’s margins in 2024, and “Peltola’s decision to run Alaska presents tough sledding for any Democrat,” Elena writes. “Peltola’s 2022 wins came in large part because of a bitterly divided GOP field, and besides her victories that year, Democrats have won just one other federal race in Alaska in the last half-century.” Sabato’s Crystal Ball changed its rating of the race from “safe Republican” to “leans Republican” this morning. Watch her announcement video He’s out: Michigan Democratic Lt. Gov. Garlin Gilchrist, who launched a gubernatorial run 10 months ago, said Monday he is suspending that campaign and instead running to be the state’s next secretary of state, POLITICO’s Brakkton Booker writes in. Though he’s served two terms as Gov. Gretchen Whitmer’s No. 2, his gubernatorial bid never caught on. Most primary polls had him trailing by more than 30 points to Jocelyn Benson, the state’s current secretary of state. Gilchrist, as many Democrats seeking election this cycle are doing, evoked Donald Trump as the catalyst for his campaign switch and cast himself as a bulwark for the state against presidential overreach. “You sounded the alarm about this president who acts like a king,” he said. “You know Michgan has been ground zero in the battle for free and fair elections before, and it will be again.” Watch the video announcement His decision to bail on the gubernatorial race clears the field for Benson and spares her from having to dip into her campaign coffers to secure the Democratic nomination, but her path to victory in the general election is less certain. For his part, Gilchrist jumps into another crowded primary contest for Michigan’s secretary of state, but because of his eight years as LG enters the contest as the presumptive frontrunner. Michigan holds its primary Aug. 4. Trail mix: Tiffany Burress is jumping into the GOP race to take on Rep. Nellie Pou (D-N.J.) for New Jersey’s 9th District, New Jersey Globe’s Joey Fox reports. … Megan Degenfelder announced she’s entering the Republican race for governor of Wyoming with Trump’s support. Cash dash: The Senate Leadership Fund, aligned with Senate Republicans, announced today that it raised “an unprecedented $180 million in 2025,” doubling their last off-year record. They also reported over $100 million in cash on hand. … Former Rep. Ben McAdams, running in Utah’s redrawn 1st District, announced he raised $953,000 last quarter after having entered the race in November, per POLITICO’s Samuel Benson. … Michael Whatley, who’s mounting the GOP campaign to beat in North Carolina’s Senate race, hauled in $5.1 million last quarter, the Daily Caller’s Adam Pack reports. Big read: “Inside Democrats’ Brewing Debate Over Which States Should Vote First in 2028,” by NYT’s Shane Goldmacher: “[E]arly whisper campaigns about the weaknesses of the various options already offer a revealing window into some of the party’s racial, regional and rural-urban divides, according to interviews with more than a dozen state party chairs, D.N.C. members and others involved in the selection process. Nevada is too far to travel. New Hampshire is too entitled and too white. South Carolina is too Republican. Iowa is also too white — and its time has passed.” 2. MINNESOTA FALLOUT: House Democrats are taking DHS back to court for the renewed effort to block congressional oversight at ICE facilities, per POLITICO’s Kyle Cheney. On the ground, WaPo’s Caroline O'Donovan profiles Minnesota state Sen. Zaynab Mohamed, an increasingly high profile and social media savvy local lawmaker of Somalian descent who has come up during some of Minneapolis’ most politically volatile years. And in Minneapolis’ residential communities, WaPo’s Molly Hennessy-Fiske and colleagues have a look at the ICE watchers network, now in the spotlight after Renee Good’s killing last week. 3. BIG SPENDERS: “New megadonors with major business before the government back Trump’s super PAC,” by NBC’s Ben Kamisar: “More than a dozen donors who gave at least $1 million to the Trump-affiliated MAGA Inc. super PAC after the president’s 2024 election win hadn’t previously given federal political donations to anyone approaching even 10% of that size … For some, it was their first time sending a disclosed donation to any Trump-aligned political group. … The list … includes a handful of America’s most prominent business leaders, including Dallas Cowboys owner Jerry Jones, Palantir CEO Alexander Karp, OpenAI President Greg Brockman and Todd Boehly, who co-owns several of the world’s most popular sports teams.” 4. AMERICA AND THE WORLD: Iran is keeping its communications open through U.S. envoy Steve Witkoff as Trump measures how to respond to the growing deadly protests across the country, Reuters’ Jana Choukeir and colleagues report. The death toll in the protests is now at 544 verified deaths, per U.S. based human rights group HRANA. The country’s foreign minister, Abbas Araghchi, said this morning that Iran is “not looking for war, but we are prepared for war,” while also pressing for negotiations, per NYT. The push for diplomacy comes as Trump will be briefed on potential strikes tomorrow, and has left the door open on all his options. Mexico: Trump spoke with Mexican President Claudia Sheinbaum this morning, which she described as a “very good conversation” where they discussed combatting drug trafficking, Sheinbaum said on X. Secretary of State Marco Rubio spoke with Mexico’s foreign minister yesterday to “discuss the need for stronger cooperation to dismantle Mexico’s violent narcoterrorists networks,” and stressed getting “tangible results,” per WSJ’s Vera Bergengruen. Venezuela: The country’s leading human rights organization, Foro Penal, said this morning that at least 24 political prisoners have been released from prison today — bringing the total released to 41, NYT’s Amelia Nierenberg reports. Meanwhile in Vatican City, Venezuela’s opposition leader and Nobel laureate María Corina Machado met with Pope Leo XIV as she pushes for a democratic transition back home, WaPo’s Anthony Faiola reports. Machado will head to Washington to meet with Trump this Thursday, per CNN’s Alayna Treene. Greenland: Europe is increasingly amping up calls to secure Denmark’s control of Greenland, with the EU’s defense commissioner saying the EU would provide extra defense at Denmark’s request and warning a U.S. takeover would mean the end of NATO, Reuters’ Johan Ahlander writes. Britain is in talks with NATO allies about ramping up their presence on the island, with British PM Keir Starmer seeking to convince Trump that Europe takes Russian threats “extremely seriously” but that annexing Greenland won’t be the answer, FT’s George Parker and Henry Foy report. 5. MEDIAWATCH: N.Y. Mag’s Reeves Wiedeman is out with a must-read deep dive on David Ellison, head of Paramount Skydance and son of Oracle tycoon Larry Ellison, who’s lining himself up to be the next kingmaker of the media industry. Through the Paramount Skydance merger, and now with a hostile bid for Warner Bros. Discovery, Ellison “has revealed an empire-building streak in line with his father.” It’s hard to understate just how vast the media empire could go: Paramount Skydance owns CBS, Warner owns CNN and the elder Ellison’s Oracle is set to take a stake in the ownership of TikTok. Put aptly, it’s “spurred concerns that the suddenly omnipresent Ellisons are building an empire that could dwarf even the Murdochs’.” The latest: “Paramount files lawsuit in pursuit of Warner Bros. Discovery and threatens proxy fight,” by CNN’s Brian Stelter and Liam Reilly 6. DO AS I SAY, NOT AS I DO: “Tom Steyer rails against plutocrats. His firm has Cayman Islands-based funds,” by POLITICO’s Debra Kahn: “Tom Steyer is running for California governor as an enemy of tax-avoiding plutocrats. … It’s a major part of Steyer’s effort to position himself as a populist. It’s also a reminder of a familiar Achilles’ heel: Steyer, who says he wants to pay more in taxes, still benefits from low-tax policies when it comes to his own business interests. His investment firm, Galvanize Climate Solutions, has some $6.8 billion under management. About $1 million of that is in two Cayman Islands-based funds.”
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