Polymarket immediately raised Waller’s odds to chair the Fed from 27% to 85% following reports that the Justice Department would drop its criminal investigation into Jerome Powell, removing a key hurdle in the Senate.
Prediction markets are dramatically reassessing the odds that Christopher Waller will become the next Fed chairman after new indications that the Justice Department will drop its criminal case against Jerome Powell. In Polymarket, contracts tied to the outcome “Waller confirmed as Federal Reserve Chairman by May 15th” have jumped from about 27% to about 85% in the short term, a relative increase of 211%, reflecting traders’ belief that major political obstacles will soon disappear.
Although the specific Waller market is separate from the larger polymarket “Who will be confirmed as Fed Chairman?”, the underlying dynamics are the same when it comes to the “Kevin Warsh was confirmed as Fed Chairman…?” contract. Odds are reacting to developments in the Powell investigation and the Senate Banking Committee’s stance. On the broader Fed chair contract, Kevin Warsh still has an implied lead of about 94% over other candidates such as Judy Shelton and Michelle Bowman, but short-term timing markets have become much more sensitive to any news about Powell’s legal overhang.
Federal prosecutors opened a criminal investigation against Mr. Powell earlier this year in connection with alleged overruns on renovations of two historic Fed buildings, sparking an unusual public clash between the central bank and the Trump administration, according to a detailed timeline compiled on Wikipedia. As of April, Mr. Powell had not been charged with any crime, and the Justice Department formally closed the investigation on April 24, clearing a key condition that Sen. Thom Tillis (R-North Carolina) had linked to support for his successor.
Mr. Tillis, the ranking member of the Senate Banking Committee, had repeatedly warned that he would use his position to block Mr. Trump’s nominees from receiving votes on the committee as long as the Justice Department investigation continued. Local news outlets such as KATV and KOMO News reported this week that Tillis “will continue to block President Trump’s nominees until the Justice Department concludes its investigation into current Chairman Powell,” effectively making the Justice Department’s decision a key issue in the approval schedule.
With that hurdle now expected to be removed, traders are betting that the Senate could move quickly enough to confirm Waller before Powell’s term officially ends on May 15. Polymarket’s live odds page points out that the timing contract for the Fed chairman is a “yes” if the nominee wins Senate confirmation by the deadline, and a “no” if the nomination is withdrawn or rejected. This structure helps explain why even small changes in the Justice Department’s stance can cause large fluctuations in market prices. short-term probability.
