Jerome Powell out from Fed Board by December 31?

Prediction markets put the probability at 43%: Jerome Powell out from Fed Board by December 31. Currently, markets are divided (43% YES, 57% NO). Jerome Powell Is Doing Something No Fed Chair Has Done Since 1948.

What’s Happening

The probability that Jerome Powell will be out from the Fed Board by December 31 currently stands at 43%, reflecting deep uncertainty after the former chair announced on April 29, 2026 that he would remain on the board of governors following the end of his term as chair. This marks the first time since 1948 that a former Fed chair has stayed on the board, breaking a 78-year precedent. Powell’s decision comes as the Federal Reserve faces four dissenting votes on interest rate policy at its most recent meeting, the highest level of internal fragmentation in over a decade, as inflation expectations rise amid supply shocks from tariffs and the ongoing conflict with Iran. [Yahoo Finance, May 01]

The political and legal pressure on Powell has intensified sharply. President Donald Trump has publicly attacked Powell, posting on social media that “Jerome ‘Too Late’ Powell wants to stay at the Fed because he can’t get a job anywhere else,” while US Attorney for the District of Columbia Jeanine Pirro stated on May 3, 2026 that she may reopen a criminal investigation into Powell over building renovation allegations at the Fed’s headquarters. The White House has explored informal measures to force Powell out, including a suggestion from an economist close to the administration to revoke his parking privileges at the Fed building. Incoming Chair Kevin Warsh, who faces a balancing act between Trump’s demand for rate cuts and elevated CPI readings above 3.5%, could see Powell dissent on policy votes if he remains on the board. [CNN, May 03]

The market’s 57% NO probability suggests traders currently expect Powell to remain on the board through year-end, but the outcome hinges on several key developments. The US Treasury yield curve has steepened by 15 basis points since Powell’s announcement, reflecting bets that Warsh will cut rates faster than Powell would allow. A formal inspector general’s report on the Fed renovation probe, expected by June 2026, could trigger a resignation or removal proceeding. Historically, when a Fed chair has faced simultaneous political and legal pressure—last seen with Arthur Burns in 1978—the average tenure on the board after stepping down as chair was less than 6 months. The next Fed policy meeting on June 16-17, 2026 will be the first test of whether Powell votes with or against Warsh. [Fortune, May 01]

Traded on Polymarket — $135K Volume

Polymarket prices this at 40c YES with $135K in volume. Moderate liquidity — use limit orders for positions above $1K to avoid moving the price.