US prosecutor Jeanine Pirro has dropped a criminal investigation involving Federal Reserve Chair Jerome Powell, paving the way for Kevin Warsh’s confirmation as Powell’s successor. This development comes amid ongoing concerns regarding President Donald Trump’s criticisms of the independent central bank, which had previously cast uncertainty over Fed leadership.

The cancellation of the probe is significant for the financial markets as it has led to a sharp decline in US Treasury yields, with the 10-year yield dropping from around 4.34% to 4.31%. This decrease has also contributed to a 0.25% loss in the US Dollar Index, reflecting broader market reactions to the Fed’s leadership transition and investor sentiment regarding monetary policy stability.

Market professionals should note that the shift in Fed leadership could influence interest rates and monetary policy direction, potentially impacting asset valuations across various sectors, particularly those sensitive to interest rate changes.

Source: xtb.com