DOJ Expected to Close Jerome Powell Probe as Soon as Friday

Key Point

Sources cited by ABC News said the U.S. Department of Justice is expected to end its criminal probe of Fed Chair Jerome Powell as soon as Friday. Jeanine Pirro, the top federal prosecutor in the District of Columbia, said her office will close the investigation while the Federal Reserve's inspector general reviews the matter and said prosecutors could reopen the case if facts warrant. The investigation centered on Powell's Senate testimony about the Fed's $2.5 billion headquarters renovation and had raised concerns about delaying confirmation of Kevin Warsh as Powell's successor. Powell's term as Fed chair ends in May, but Powell has said he will remain in the role until his successor is confirmed.

Market Sentiment

Neutral, Policy-driven.

Reason: Sources cited by ABC News said the DOJ is expected to drop its probe of Jerome Powell, which may reduce immediate leadership uncertainty without changing Fed policy by itself.

Similar Past Cases

Investigations or political pressure around major central bank leadership usually affect markets only when they change the policy timetable or disrupt succession. This case could stay more contained if the probe closes quickly and the leadership handover remains orderly.

Ripple Effect

Leadership uncertainty can affect rate-path expectations and broader risk sentiment if investors start to price a disruptive transition at the Fed. If the probe is formally closed and the confirmation process remains orderly, spillover may stay limited to headline-driven volatility.

Opportunities & Risks

Opportunities: Watch whether the DOJ formally closes the case and whether the succession process advances without delay. A clean sequence would suggest limited spillover into macro pricing.

Risks: Watch whether prosecutors reopen the case or whether Powell's successor faces a delayed confirmation. Either outcome could keep Fed leadership uncertainty in focus for risk assets.