The Fed walked into this week with a rate decision that everyone already knows. It's the political backdrop that changed.
Three days ago, Powell was sitting under a criminal investigation, and now he isn't, which means his replacement could be running the show by June.
Rates are staying put, with Bank of America economists calling the move firmly on hold and bond markets pricing no cuts until at least the middle of 2027.
The real debate is what the Fed says about what comes next, since some officials at the March meeting started openly talking about possible rate hikes if inflation keeps climbing. Inflation has stayed about a percentage point above the Fed's 2% target, with the latest CPI print posting its biggest jump in nearly four years.
Why? Oil. Brent crude is up about 50% since the war started, which fed straight through to gasoline prices and the wider inflation gauge.
Powell's eight-year run as Fed chair ends May 15, and until Friday, he was caught in a legal fight that could have stretched the timeline.
The Justice Department had been investigating him over the $2.5 billion Fed headquarters renovation, a probe Powell said was payback for refusing to cut rates as fast as Trump demanded. U.S. Attorney Jeanine Pirro dropped the criminal probe Friday and handed it to the Fed's inspector general, a move that pulled Senator Thom Tillis off his block of Trump's Fed pick.
Warsh's confirmation is now a matter of when, not if.
Powell could leave the Fed entirely on May 15, or he could stay on as a governor until January 2028, the last full year of Trump's term.
He said last month he'll decide based on what's best for the institution. Reporters will likely press him on that during Wednesday's press conference, since the answer determines whether he keeps a Fed seat while Warsh sets policy.
Watch the FOMC statement at 2 p.m. Eastern for any new language that signals possible rate hikes. Powell's press conference at 2:30 may be where the bigger news lives.
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