Tillis backs Warsh for Fed Chair as DOJ drops Powell probe

Senator Thom Tillis’s readiness to back Kevin Warsh’s confirmation as Federal Reserve Chair clears a major hurdle after the DOJ dropped its investigation into Jerome Powell. The likelihood of Warsh’s confirmation by May 1 is now at 2% YES, up from 1% yesterday.

The biggest action is in the May 15 contract, which jumped to 92% YES from 29% a day ago. Traders expect the Senate Banking Committee to vote Warsh out favorably, clearing his path to a full Senate vote. The June 30 contract sits at 96% YES, up from 82% yesterday.

The term structure points to an expected catalyst in early May. A 90-point gap between the May 1 and May 15 contracts suggests traders anticipate a rapid confirmation process once the committee votes. With just $121 needed to move the May 1 contract by 5 points, any substantial order could shift the odds quickly.

Tillis’s support removes a real obstacle, but the May 1 contract remains at 2%, reflecting skepticism about an immediate confirmation. Contrarian traders might consider this contract, which pays $1 for each YES share bought at 2¢, a potential 50x return if confirmed by May 1.

Watch for the Senate Banking Committee’s vote on April 29, which will determine Warsh’s confirmation timeline. Any unexpected delays or opposition could move the odds sharply.

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