The Justice Department’s April 2026 closure of its criminal probe into Fed Chair Jerome Powell—centered on alleged misleading testimony about $2.5 billion headquarters renovations—remains the dominant factor shaping trader sentiment. Prosecutors found no evidence of a crime after a judge quashed subpoenas as pretextual attempts to pressure rate policy, and the matter shifted to the Fed inspector general without charges. With Powell’s term ending in May and successor Kevin Warsh advancing toward confirmation, the episode highlighted political risks to Fed independence but produced no indictable conduct. Current market-implied odds reflect these evidentiary and institutional barriers, tempered by the possibility of renewed scrutiny only if new facts emerge before year-end.