Trade Alert: Long Gold
DOJ expected to drop criminal probe of Fed Chair Jerome Powell amid pressure from senators: Sources
This headline just dropped and allows Tillis to vote in favour of Warsh. The market had priced in Powell continuing to serve up until Warsh got voted in, which would have delayed any expectation of rate cuts. Moreover, dropping the criminal charges against Powell here could potentially make him decide to resign after his term as Fed Chair ends, which most Chairs do once their terms end. Obviously, with the charges against him, it was in Powell's interest to play hero, but it seems like the administration is calling a truce. Obviously this headline is a rumour, but it does make sense for approving Warsh promptly. This definitely will add fuel to the fire in terms of the dovish path ahead, and given the fact that inflationary pressures are creeping higher, we could very much see real interest rates falling, which favours risk bets.
2s30s steepened here…
