Kalshi lifts Warsh confirmation odds after DOJ ends Powell probe

Prediction market traders on Kalshi pushed Kevin Warsh’s odds of Senate confirmation sharply higher after the Department of Justice said it would end its inquiry into Federal Reserve Chair Jerome Powell. The May 15 contract rose from about 30% to 86%, and the June 1 contract climbed above 97%.

The market shift occurred Monday morning following the DOJ announcement. Warsh, nominated by President Donald Trump to replace Powell, testified before the Senate Banking Committee on Tuesday. Traders moved quickly after Republican Senator Thom Tillis made clear he would not advance Warsh’s nomination while a criminal inquiry into Powell remained open; Tillis had previously expressed support for Warsh.

Some senators pressed for more information before any confirmation vote. Senators Elizabeth Warren and Dick Durbin wrote to U.S. Attorney Jeanine Pirro seeking details about the decision to end the inquiry and about material the DOJ referred to the Federal Reserve inspector general. They also asked whether the White House had been notified and what facts would be needed to reopen the probe.

In their letter, the two Democrats wrote, “Your announcement leaves the door wide open for you to relaunch the criminal probe against Chair Powell, or future baseless investigations into Powell or other Fed Governors and a future Fed Chair, should it once again become politically expedient for you to do so.” They added, “From your perspective, what are the types of ‘facts’ that would warrant reopening the investigation?”

The White House issued a statement after the DOJ announcement, stating, “American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter.” The statement added the administration remained confident the Senate would “swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision-making.”

Powell disclosed in January that a grand jury investigation had been opened, releasing a rare video statement. He said the threat of criminal charges stemmed from the Fed setting interest rates based on its assessment of the public interest rather than the President’s preferences and warned the situation raised questions about whether monetary policy would be guided by evidence and economic conditions or by political pressure and intimidation.

U.S. District Judge James Boasberg later rejected two DOJ subpoenas sent to the Federal Reserve. In his ruling he wrote, “A mountain of evidence suggests that the Government served these subpoenas on the Board to pressure its Chair into voting for lower rates or resigning,” and said the government had “essentially zero evidence” to suspect Powell of a crime.

Even with the DOJ inquiry closed, senators continue to seek more detail about the referral to the inspector general and about the conditions under which the investigation could be reopened. Powell is expected to face questions at his press conference following this week’s Federal Open Market Committee meeting. President Trump has also said he could remove Powell if he does not step down after his chair term ends in January 2028.

The rapid re-pricing on Kalshi reflected traders updating the expected timing of Senate action on Warsh’s nomination after the DOJ announcement, with the market assigning a high probability of confirmation by mid-May or early June unless new developments occur.