Overview
- The Justice Department’s criminal investigation targets Jerome Powell’s June congressional testimony on a $2.5 billion Fed headquarters renovation, which Powell disclosed and condemned as a political pretext.
- Sen. Thom Tillis and other lawmakers have threatened to block or delay any Fed nominations until the probe is resolved, elevating confirmation risk for the White House pick.
- After Trump’s remarks, Kalshi and Polymarket odds shifted sharply toward former Fed governor Kevin Warsh, Hassett’s odds fell, and the 10‑year Treasury yield ticked above 4.2% on expectations for a less dovish chair.
- Treasury Secretary Scott Bessent, who is steering the search, suggested the inquiry may reflect “construction incompetence,” called for greater Fed transparency, and said a decision is expected soon.
- Support for Fed independence intensified as Vice Chair Philip Jefferson called Powell “of the highest integrity,” and JPMorgan’s Jamie Dimon ruled out serving as Fed chair while warning interference would drive rates higher.