Kevin Warsh just became the next Fed Chair in everything but name.
Sen. Thom Tillis one of the last swing votes just confirmed his support.
With Tillis on board, Warsh's confirmation is all but assured.
And it arrives on the same day the DOJ dropped its criminal probe into Jerome Powell.
Here's everything happening at once.
The DOJ investigation into Powell tied to cost overruns in Federal Reserve building renovations has been quietly dropped.
The probe will only reopen if the Fed's own inspector general recommends charges.
Translation: it's over. Powell exits without indictment. The transition is clean.
And the man replacing him just cleared his final Senate obstacle.
This is the most consequential leadership transition at the Federal Reserve since Paul Volcker.
Here's what markets need to understand about Warsh.
Former Fed governor. Morgan Stanley investment banker. Known hawk. Confirmed Trump ally.
He inherits:
Rates at 3.50–3.75%. Inflation still at 3.3%. A dot plot with one cut penciled in for all of 2026. Jobless claims ticking higher three straight weeks. Three U.S. carriers in the Middle East. $700 billion in Big Tech AI capex. A $39 trillion national debt.
And a market that has priced in very little uncertainty about what he does next.
That uncertainty gap is the trade.
Powell was predictable. The market priced Powell.
Warsh is an unknown quantity with a known ideology.
The first time he diverges from what the market expects in either direction the repricing will be violent.
Tillis just handed him the keys.
Now watch what he does with the car.