The Powell subplot gets a little less weird
So the latest Fed soap opera may be losing steam. According to the Schwab folks cited in the piece, the DOJ could drop its criminal investigation into Fed Chair Jerome Powell, which would clear a major obstacle in the way of Kevin Warsh’s confirmation. Translation: one less political grenade rolling around just before next week’s FOMC meeting.
Why investors should care
This isn’t just inside-baseball for policy nerds. The Fed’s leadership setup matters because it can shape how markets think about the next rate path, the tone of the meeting, and whether the central bank looks calm, chaotic, or somewhere in between. If the probe gets shelved, that removes a source of uncertainty — and investors usually like their central banks less like reality TV.
The market still has bigger things to juggle
Even with the Powell noise cooling off, the broader backdrop is still doing its best impression of a stress test:
- U.S. economic data has stayed resilient, which keeps the “higher for longer” conversation alive.
- Geopolitical tensions haven’t gone anywhere.
- Higher energy prices are still poking inflation fears in the shin.
That combo makes the next Fed meeting a lot more interesting than a simple waiting game. Strong data can support growth, sure — but it also makes rate cuts harder to justify without the Fed losing its inflation-fighting cred.
Big picture
If the DOJ truly steps back, the Fed gets to walk into FOMC week with one fewer headline hanging over it. That’s not a full market reset, but it is one less reason for investors to squint at every policy signal like it’s a season finale cliffhanger.