Asia Morning Briefing: Traders see minimal likelihood of Powell’s exit even amid DOJ scrutiny.

Prediction markets are signaling little concern that Federal Reserve Chair Jerome Powell will be removed early, despite a federal criminal investigation into the Fed’s $2.5 billion headquarters renovation.

On Polymarket, the probability that Powell steps down by March 31 sits at just 8%, barely changing even after Powell claimed the probe is being used to pressure monetary policy. Another Polymarket contract places a 67% chance that Powell leaves the Fed Board by late May, suggesting his influence may persist even after leaving the chair role. Kalshi contracts reflect a similar outlook: markets currently price just a 19% chance of Powell exiting before May 2026, up sharply on the day but still considered unlikely.

Traditional markets are echoing that caution. Cryptocurrencies were largely steady, with bitcoin near $91,400 and ether above $3,100, indicating traders are not positioning for immediate Fed policy shifts. By contrast, safe-haven assets moved higher: gold rose above $4,580 an ounce and silver gained over 4.5%, reflecting either higher metals volatility or expectations for continued loose monetary policy under a potential new Fed chair.

Prediction market traders are favoring Kevin Warsh as a possible successor, giving him a 43% chance of taking the position according to Polymarket. Warsh has argued that inflation stems from excessive government spending and an overextended central bank, calling for a smaller, less politicized Fed, a reduced balance sheet, and a renewed focus on strict price stability.

Market snapshot:

• Bitcoin (BTC): Trading near $91,400, largely ignoring the political uncertainty at the Fed.
• Ethereum (ETH): Around $3,125 after retreating from its 100-day moving average; momentum remains constructive, suggesting a potential short-term recovery alongside bitcoin and XRP if key support holds.
• Gold: Up more than 1% to roughly $4,573, extending gains after mixed U.S. jobs data reinforced expectations for Fed rate cuts amid slowing growth, sticky inflation, and a weaker dollar.
• Nikkei 225: Closed for a public holiday, leaving Japanese investors on the sidelines as broader Asia-Pacific markets followed Wall Street’s record gains.