Despite the DOJ probe, markets are discounting the risk of Powell stepping down: Asia Morning Briefing.

Prediction markets are largely shrugging off the possibility that Federal Reserve Chair Jerome Powell will be removed early, despite a federal criminal investigation into the Fed’s $2.5 billion headquarters renovation.

Markets on Polymarket show just an 8% chance that Powell will step down as Fed chair by March 31, a figure that barely shifted even after Powell accused the administration of using the investigation to influence monetary policy. Another Polymarket contract assigns a 67% probability that Powell will leave the Fed Board by late May, suggesting his influence could persist even after he departs as chair. Similarly, Kalshi contracts on whether Powell exits before May 2026 rose to around 19%—up sharply on the day but still signaling that removal is considered unlikely rather than a base case.

Traditional markets appear to mirror that restraint. Cryptocurrencies remained largely flat, with bitcoin near $91,400 and ether holding above $3,100, indicating traders are not repositioning for immediate shifts in U.S. monetary policy. By contrast, safe-haven assets moved decisively: gold rose above $4,580 an ounce, and silver gained more than 4.5%, reflecting either their higher volatility relative to crypto or anticipation of continued loose monetary policy under a new Fed chair.

Prediction market traders are currently favoring Kevin Warsh as Powell’s potential successor, giving him a 43% chance according to Polymarket. Warsh has argued in Wall Street Journal op-eds that inflation is driven by excessive government spending and an overextended central bank, calling for a smaller, less politicized Fed, a sharply reduced balance sheet, and a renewed focus on price stability.

Market snapshots:

• BTC: Bitcoin traded near $91,400, signaling that crypto markets are largely overlooking political uncertainty at the Fed.
• ETH: Ethereum hovered around $3,125 after retreating from its 100-day moving average, with momentum indicators suggesting a possible short-term recovery alongside bitcoin and XRP if support levels hold.
• Gold: Gold rose over 1% to roughly $4,573, extending gains after mixed U.S. jobs data reinforced expectations for Fed rate cuts amid slowing growth, persistent inflation, and a weaker dollar.
• Nikkei 225: Japan’s Nikkei 225 was closed for a public holiday, keeping local investors on the sidelines while broader Asia-Pacific markets followed Wall Street’s record gains.

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