Prediction markets are pointing to a 63% chance that President Donald Trump will attempt to remove Jerome Powell not only as the Federal Reserve Chairman but also as a member of the Fed board of governors before next year.
Powell’s tenure as Fed chief ends in May, but he will have two years left on his term as governor.
Kalshi traders are assigning a 41% to Trump removing Powell before May 15, 2026.
DOJ Probe May Roil Markets, GOP Warns
The prediction comes following the public disclosure of a criminal investigation into Powell by the Department of Justice. The President’s allies and officials have expressed concerns about the impact of a public clash between the White House and the Federal Reserve, warning that it could push interest rates higher and potentially disrupt the markets.
Sen. Thom Tillis (R. N.C.) announced that he would oppose any Fed nominee put forward by Trump until the legal matter is resolved, potentially blocking a nominee from reaching a full floor vote, given the narrow split in the Senate Banking Committee.
Fed’s Unique Move To ‘Trump-Proof’
The Fed in December took steps to insulate itself from political interference, such as the reappointment of all 12 regional Reserve Bank presidents and first vice presidents months ahead of their expiration.
The central bank’s operating arm leadership received early confirmation for new five-year terms starting March 1, 2026, a move that drew attention for its timing. Economist Justin Wolfers described the unanimous vote as a strategic effort to insulate the Fed from political pressure, calling it “Trump-proofing” the institution.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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