DOJ Examines Powell Testimony Amid Fed Renovation Controversy

• Powell is facing a DOJ criminal probe over the Fed’s renovation project.
• Polymarket shows just 8% odds of Powell stepping down before March.
• Polymarket favors Warsh and Hassett as leading contenders for Fed chair.

Federal prosecutors are reviewing US Federal Reserve Chair Jerome Powell’s testimony to Congress tied to the Fed’s renovation project. Powell claims that the Justice Department (DOJ) served subpoenas and raised the risk of indictment.

Powell linked the probe directly to pressure from President Donald Trump over interest rates, as per reports.

Trump has pushed for faster and deeper rate cuts since returning to the White House in January 2025. He has publicly said he wants Powell gone once the chair’s term ends in May.

Trump has also floated legal action tied to the renovation, which he claims could exceed $4 billion in total cost. Powell rejected these claims. He said that Congress received full disclosure and calls the charges a pretext.

Powell said that this issue is more of a test of central bank independence rather than a legal dispute over construction spending.

Market Not in Favor of Early Removal

Despite a criminal probe tied to the Federal Reserve headquarters renovation, prediction markets do not price in an early removal of Chair Powell.

On Polymarket, the odds that Powell leaves the Fed chair role before March 31 stand near 8%. A separate Polymarket contract prices a 68% chance that Powell leaves the Fed Board by late May.

This lines up with the scheduled end of his chair term, not a forced exit. Traders expect Powell to retain influence through his governor seat, which runs until January 2028.

Kalshi data tells the same story. Odds that Powell exits the chair role before May 2026 rose to about 18% after news of the probe. 

Markets Price Stability, Warsh or Hassett is Next

Meanwhile, broader markets show little stress. Bitcoin trades near $92,000. Ether holds above $3,100. Meanwhile, metals moved higher. Gold trades below $4,500 per ounce. Silver gains over 4.5% on the day.

This looks less like a Powell-specific trade and more like an extension of the ongoing bid for hard assets. If traders truly expected an abrupt Fed shift, crypto volatility would lead, not lag.

Interestingly, when traders look past Powell, they focus on Kevin Warsh and Kevin Hassett. Polymarket shows Warsh a 42% chance to become the next Fed chair and 41% to Hassett.

Warsh has argued that inflation came from excess spending and an oversized central bank, not supply shocks or trade policy. His stated plan centers on a smaller Fed balance sheet and a strict focus on price stability.

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