Kevin Warsh's Senate confirmation process is underway, signaling a likely transition at the Federal Reserve. Prediction markets show a 96% probability that Jerome Powell will be out as Fed Chair by May 31, up from 92% yesterday. The June 30 market sits at 99.7%, reflecting near certainty of Powell's exit by then.
Warsh, nominated by President Trump, is known for his hawkish views. His commitment to Fed independence suggests a lower likelihood of rate cuts in 2026. The May 15 market saw a 25-point drop, likely driven by uncertainty over Warsh's swift confirmation. The key date to watch is the May 4 Senate session, where a vote could clarify the confirmation timeline.
For traders, a YES share on Powell out by May 14 is currently priced at 5.2 cents, offering a potential 19.2x return if confirmed quickly. However, given the current odds, that bet is risky.