Fed Chairman Powell under fire from Sen. Lummis and Rep. Luna over Operation Chokepoint 2.0 and perjury allegations.

Sen. Lummis criticizes Fed Chair Jerome Powell for mismanaging Operation Chokepoint 2.0 and unfairly targeting the digital asset industry. She also supports Rep. Anna Luna's allegations of perjury against Powell, who allegedly lied about the necessity of costly renovation of the Federal Reserve headquarters building. Lummis notes that proving perjury is "very hard" and Powell was not under oath when testifying.

Sen. Cynthia Lummis, a prominent advocate for Bitcoin reserves, has expressed significant concerns regarding the handling of Operation Chokepoint 2.0 by Federal Reserve Chair Jerome Powell. Additionally, Lummis has echoed Rep. Anna Paulina Luna's allegations of perjury against Powell, which some view as part of a broader effort to challenge the Fed Chair's leadership.

Lummis' criticism of Powell centers on the central bank's handling of Operation Chokepoint 2.0, a series of actions taken by the Federal Deposit Insurance Corporation and the Department of Justice to pressure banks into halting services for clients involved in cryptocurrency transactions. Lummis has argued that the Fed's approach to this operation was unfair and targeted the digital asset industry, driving solvent banks into insolvency. She has also expressed concern over the Fed's subjective determinations regarding what types of businesses should be financed, particularly those involved in oil, gas, coal, and energy sectors that are not aligned with certain economic views.

In a recent interview, Lummis stated, "I am concerned about the way he handled Chokepoint 2.0, the way that they went after banks that were solvent and drove them into insolvency, the way that the Fed has dealt with using subjective determinations about what banks should be financing, oil, gas, coal, energy, that certain aspects of our economy doesn’t approve of. These are the bigger concerns I have about Jay Powell and the manner in which bank supervision has been conducted" [1].

Lummis has also supported Rep. Anna Paulina Luna's allegations of perjury against Powell. Luna has referred Powell to the Department of Justice for alleged perjury related to the Fed's overspending on the renovation of its headquarters building. Powell was accused of lying about the necessity of costly renovations, with Luna citing a $700 million cost overrun. Lummis acknowledged the difficulty of proving perjury, noting that Powell was not under oath during his testimony [1].

Powell has been the target of increasing pressure from President Trump, who has repeatedly called for rate cuts to boost the economy. Trump has even threatened to fire Powell, though such an action would require Supreme Court involvement due to the Fed's independent status. The ongoing feud between Powell and Trump has raised questions about the independence of the Federal Reserve and the potential implications for the U.S. economy and financial markets.

The potential resignation of Powell could have significant implications for the U.S. dollar and the crypto market. A new Fed Chair who cuts rates could lead to increased inflation, potentially driving investors to seek safer savings assets like cryptocurrencies. The crypto market has seen significant growth in response to previous economic turmoil, such as the March 2021 stock market collapse triggered by the COVID-19 pandemic [2].

As the Federal Open Market Committee prepares to announce its interest rate policy on July 29-30, 2025, several rumors surrounding Powell's leadership and the Fed's monetary policy have emerged. These include reports that Trump sought to fire Powell, concerns about the high cost of Fed renovations, and questions about Powell's successor. The FedWatch tool predicts a 95.3% chance that the current target rate will remain unchanged, with the odds of a 25-bps cut rising to 58% by September [2].

In conclusion, Sen. Lummis' criticism of Jerome Powell and her support for Rep. Luna's allegations highlight the ongoing political and economic tensions surrounding the Federal Reserve's policies and leadership. The potential resignation of Powell and the implications for the U.S. economy and financial markets remain a critical issue to watch as the Federal Reserve prepares to announce its monetary policy decisions.

References:
[1] https://crypto.news/sen-lummis-slams-fed-chair-powell-over-his-role-in-operation-chokepoint-2-0/
[2] https://seekingalpha.com/article/4802586-three-rumors-fed-chair-powell-might-not-address-july-fomc-meeting