DOJ drops Powell probe, clearing path for Warsh’s Fed Chair nomination

The Department of Justice has dropped its criminal investigation of Federal Reserve Chair Jerome Powell, removing the main barrier to Kevin Warsh’s nomination as Fed Chair. Warsh’s confirmation by May 15 now sits at 84% YES, up from 29% just 24 hours ago.

The market for Warsh’s confirmation by May 1 remains low at 2.2% YES, given the tight timeline. The May 15 contract, though, is at 84% probability. The largest move in the last 24 hours was a 20-point spike from 68% to 88% at 2:18 PM, which suggests traders expect swift Senate action.

With the DOJ investigation closed, Warsh’s confirmation process could speed up. The sharp gap between the May 1 and May 15 contracts points to traders pricing in a specific catalyst in the next two weeks. The June 30 market is at 98% YES, but the real action is on the nearer-term May dates.

Volume hit $18,745 in USDC over the last 24 hours across the Warsh confirmation markets. The order book depth for the May 15 contract requires $1,747 to move the price 5 percentage points, which indicates moderate thickness. The market isn’t easily pushed by a single trader but is still susceptible to large orders.

Warsh’s potential confirmation is also shaping expectations for monetary policy. His hawkish stance could mean more aggressive interest rate moves, which feeds into the Federal Reserve rate predictions market for end of 2026. A YES share at 2¢ for Warsh being confirmed by May 1 pays $1 if successful, a 50x return with correspondingly low probability.

Watch for movement in the Senate Banking Committee, particularly any scheduled hearings or votes. If Thom Tillis announces support for Warsh, the May 15 probability could climb further.

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