US prosecutor Jeanine Pirro dropped a criminal probe involving Federal Reserve Chair Jerome Powell on Friday, clearing the way for his replacement's confirmation amid concerns over President Donald Trump's attacks on the independent central bank.
The aftermath of the probe cancelation:
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Fed Leadership Transition: The path for Kevin Warsh to succeed Jerome Powell as Federal Reserve Chair is now clear, as US prosecutor Jeanine Pirro dropped a criminal probe involving Powell on Friday.
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Investigation Scope: The criminal investigation will be replaced by a review by the Fed's inspector general, who will look into renovation cost overruns.
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Market reaction: The yields on US Treasuries dropped sharply following the announcement (10Y: from the peak around 4.34% to 4.31%), exacerbating today’s losses in the dollar (USDIDX: -0.25%).
US 10Y yields (white) and Bloomberg's Dollar Index (cyan) correct down from local highs. Source: Bloomberg Finance LP
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