Overview
- President Trump told a White House audience he wants to keep National Economic Council director Kevin Hassett in his current role, a remark that upended expectations in the search to replace Jerome Powell.
- Prediction markets swiftly elevated former Fed governor Kevin Warsh to front-runner status, with Kalshi and Polymarket showing his odds near 59% as Treasury yields ticked higher on the prospect of a more hawkish chair.
- The Justice Department’s criminal investigation into Powell over testimony on a $2.5 billion headquarters renovation remains active, with Powell denying wrongdoing and calling the action a pretext for political pressure.
- Republican Sen. Thom Tillis and other lawmakers warned they may block Fed confirmations until the probe is resolved, while Fed Vice Chair Philip Jefferson praised Powell as "of the highest integrity" and Boston Fed’s Susan Collins underscored the need for central bank independence.
- Treasury Secretary Scott Bessent suggested the inquiry may stem from construction mismanagement and said final interviews for the chair search are complete, as Jamie Dimon ruled out serving as Fed chair and cautioned that eroding independence could push rates higher.