Powell's Exit Probability Skyrockets as Trump Influence Looms
The market for Jerome Powell departing as Fed Chair by May 22 surged an unprecedented +48 points, reaching 95¢. This signals a dramatic and sudden reassessment of Federal Reserve leadership stability, raising questions about the future of monetary policy under a potential Trump second term.
Key takeaways
- 01
The market for Jerome Powell departing as Fed Chair by May 22 surged an unprecedented +48 points, reaching 95¢.
- 02
This signals a dramatic and sudden reassessment of Federal Reserve leadership stability, raising questions about the future of monetary policy under a potential Trump second term.
- 03
In a stunning move, the prediction market for Jerome Powell's departure as Fed Chair has effectively flipped from a longshot to a near-certainty.
Full analysis
In a stunning move, the prediction market for Jerome Powell's departure as Fed Chair has effectively flipped from a longshot to a near-certainty. The contract for his exit between May 15 and May 22 jumped a remarkable +48 points to 95¢, dwarfing all other political moves today. Traders are reacting swiftly to the possibility that Trump-aligned forces are successfully clearing the path for a new Fed chair—likely Kevin Warsh, whose own market for leading the June FOMC meeting hit 99¢. This is a paradigm-shifting event for interest rate expectations. If Powell is forced out, the market will immediately price in a more accommodative or, conversely, a more politically influenced Fed. The key contract to watch is the `KXFEDDECISION-26JUN-` market, which currently prices a 'no change' at 96¢, but this could shift rapidly. The `KXFEDLEADJUNE-26JUN1` contract, which has Kevin Warsh as chair at 99¢, directly reflects this succession. Traders should use `sf book KXFEDLEADJUNE-26JUN1` and `sf query
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sf book KXFEDLEADJUNE-26JUN1