Fed Chair Jerome Powell stated he will continue as a Fed Governor after May 15, with Kevin Warsh taking over as FOMC Chair. The Warsh confirmation market has seen rising probability, while Powell’s comments that energy shocks and tariffs must subside before rate cuts are considered have pushed odds of no cuts in 2026 higher.
Market reaction
Powell’s decision to stay on as a Governor increases confidence in Warsh’s eventual Senate approval, as reflected in the Warsh confirmation market. The outlook for Fed rate cuts in 2026 has shifted against easing, consistent with Powell’s firm stance. The April 2026 rate decision market sits at 0.1% YES, unchanged after Powell’s remarks.
No significant trades have moved the Warsh confirmation market. The rate decision markets show $12.7M in face value and $11,716 in actual USDC trading. The cost to move the market by five points is $1,966 for 25 bps and $13,251 for 50 bps cuts, pointing to real liquidity and institutional participation.
Why it matters
Powell specifically tied the timeline for easing to the persistence of current energy shocks and tariff effects, not just standard inflation metrics. This means rate cut expectations are now directly linked to geopolitical developments, particularly around energy supply disruptions, rather than domestic economic data alone. Traders betting on near-term cuts face a longer wait than previously priced in.
What to watch
Senate support for Warsh is the next major signal, particularly from Republicans like Thom Tillis. Confirmation hearings and any DOJ developments affecting Powell’s tenure could move both the Warsh confirmation and rate cut markets. On the macro side, any resolution or escalation in the Iran conflict, or unexpected shifts in economic data, could quickly reprice the rate cut timeline.
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Term Structure| Contract | Odds | Δ since publish | Volume 24h | |
|---|---|---|---|---|
| 25 bps | 0.1% | — | — | View market → |
| 50+ | 0.1% | — | — | View market → |
