Justice Department closes Powell probe, clearing path for Warsh Fed nomination

The Justice Department has closed its investigation into Jerome Powell, removing the main obstacle to the Senate confirming Kevin Warsh as the next Federal Reserve Chair. Warsh’s confirmation by May 15 sits at 82% YES, up from 29% just 24 hours ago.

## Market reaction

The closure of the Powell probe means Senator Thom Tillis is likely to lift his block on Fed nominations, clearing the way for the Senate Banking Committee to advance Warsh’s nomination. The May 15 market jumped from 29% to 82% YES in a single day. The June 30 market is at 97% YES.

The May 1 market remains at 2.4% YES, meaning traders see almost no chance of an earlier confirmation. That market trades $21,786 in face value daily but only $193 in actual USDC, which points to thin liquidity and high volatility potential. The largest move was a modest 2-point spike.

## Why it matters

Traders are reacting to the removal of a specific procedural hurdle: Tillis’s hold on Fed nominations. With that block expected to lift, the Senate Banking Committee can advance Warsh’s nomination to a floor vote. At 82¢, a YES share pays $1 if confirmed by May 15, a 1.22x return.

## What to watch

Senate Banking Committee actions and statements from key committee members will determine the timeline. The committee’s decision on whether to advance Warsh’s nomination, and when to schedule a confirmation vote, is the next concrete event that could move these markets.

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