Wyoming’s Republican Senator has criticized the U.S. Federal Reserve Bank over its role in Operation Choke Point 2.0, and now she’s calling for the Fed Chairman to step down.
Lummis Ramps Up Pressure, Calls for Powell’s Resignation
Fed Chair Jerome Powell has had a rough year. He has been taunted by the president, accused of perjury by Florida House Republican Anna Luna, and now Wyoming Senator Cynthia Lummis, the self-styled “Crypto Queen,” is demanding his departure from the central bank.
Powell has drawn the ire of U.S. President Donald Trump, primarily because the Fed chair has been reluctant to raise rates due to U.S. inflation still lingering above the Fed’s 2% target. Trump sees the higher rates as being costly to the government, which, by some estimates, is currently paying upwards of a trillion dollars just to service the country’s $36.67 trillion debt.
(Interest payments on U.S. national debt are now estimated to be more than $1 trillion per year / Bloomberg)
But Lummis’s beef goes beyond mere interest rates. The Wyoming native has repeatedly accused Powell of enabling the Biden-era government-wide effort to undermine the cryptocurrency industry, or “Operation Choke Point 2.0.”
Besides monetary policy, the Federal Reserve is also responsible for supervising financial institutions to ensure “safe and sound” banking operations. In its examination program for the supervision of American banks, the Fed has historically included a concept called “reputational risk” to ensure banks don’t engage in activities that may be viewed as negative.
Lummis alleges the Fed told banks that dealing with crypto firms would increase reputational risk, a stance that led to the debanking of dozens of crypto companies. But after a crypto-friendly Trump administration was ushered in earlier in the year, the central bank moved to scrap the reputational risk component of its bank supervision examination last month.
But that wasn’t enough for Lummis. In addition to getting rid of reputational risk, she also wanted Powell fired.
“Today, the Fed announced it will scrap reputation risk as a factor in its bank supervision. This is a win, but there is still more work to be done,” Lummis said in a June 23 post on X. “Jay Powell has proven time and time again that he is unfit to run the Fed. He must resign now,” she posted on July 9.
Lummis, who is also the chair of the first-ever Senate Banking Subcommittee on Digital Assets, has intensified her calls for Powell’s resignation. In a recent Fox News interview, host Larry Kudlow asked Lummis why she wants the Fed chair gone. She gave Kudlow a list of issues related to Operation Choke Point 2.0 and bank supervision. She also touched on Powell’s alleged mismanagement of the $2.5 billion Federal Reserve building renovation project, which has gone over budget to the tune of $700 million.
“I think now there’s enough evidence that he’s worn out his welcome,” Lummis said.
