The recent power struggle over the Federal Reserve Chairmanship has become increasingly interesting. The conflict between Trump and Powell has escalated from behind-the-scenes maneuvering to a public standoff, and it doesn’t look like there’s an easy way to resolve it.

At the core, the situation is actually quite clear: Trump wants a compliant Federal Reserve Chair, but Powell just won’t cooperate. Earlier, Powell repeatedly declined to cut interest rates in line with Trump’s wishes, prompting Trump to repeatedly publicly say he would replace him. The original plan was to wait until May 15 this year, when Powell’s term would automatically end; at that point, Kevin Wosch—Trump’s nominee—would take over, and the new chair would comply with rate cuts, so everyone would be happy.

But now things have changed. According to data from the prediction market Polymarket, the probability that Powell will step down after his term ends has dropped to just 2%, meaning he’s very likely to remain in the post as acting chair. Back in March, Powell said that if his successor hadn’t received confirmation before May 15, he would continue serving as chair. As long as the Department of Justice’s investigation into him hasn’t been completed, he won’t leave the Federal Reserve Board on his own.

So the key question now is whether Wosch can get through the Senate Banking Committee hearing on April 21. That is the deciding line on whether Powell can truly be replaced.

I noticed an interesting detail: the person blocking Wosch is Republican lawmaker Thom Tillis from North Carolina. His reason is that the Department of Justice’s investigation into Powell hasn’t been finished yet, so he refused to allow Wosch’s nomination to move forward to a full Senate floor vote. He has enough influence because, although Republicans have a 13-to-11 majority in the committee, as long as he votes “no,” Wosch’s nomination will get stuck.

More painfully, Trump has also ended up digging a hole for himself unintentionally. Last July, he inspected the renovation work on the Federal Reserve building and publicly questioned whether the budget was reasonable. As a result, the Department of Justice actually began investigating whether Powell lied to Congress about it. What Trump originally wanted to use to target Powell has instead turned into an obstacle to stopping Wosch from taking the top job.

On April 15, Trump said on Fox Business that he doesn’t plan to end the investigation into Powell just to clear the way for Wosch. He also asked a very telling question: “Don’t you think we need to find out what happened there?” It sounds like he’s trying to project confidence, but in reality it also exposes his current passive position.

Even without this investigation blocking the process, Wosch may not necessarily pass smoothly. Given the current geopolitical and economic situation, someone at the hearing will surely ask him about Federal Reserve independence and interest-rate policy. If geopolitical conflicts lead to continued tightness in energy and bulk commodities, the Federal Reserve’s focus should be on considering rate hikes rather than cutting rates. That puts Wosch in a dilemma—either always stand on Trump’s side, which would reduce his chances of getting confirmed; or defend the Federal Reserve’s current wait-and-see stance, which would anger the president.

There’s also heavy time pressure. The hearing is scheduled for April 21, with only 24 days left before Powell’s term ends. In those 24 days, the Senate plans to meet for only 13 days. That window is indeed very tight.

Of course, Trump won’t just sit and wait. He has said he would fire Powell if Powell doesn’t step down on time, but that may just be a verbal threat. To actually fire Powell, Trump needs a legal basis; he can’t do it purely because of policy disagreements. The only plausible grounds would be if Powell lied or engaged in corruption related to the Federal Reserve building renovation. But the Washington Post reported on March 25 that Department of Justice officials admitted in a closed-door hearing that they have no evidence of wrongdoing in their criminal investigation of Powell.

That’s awkward. If Trump really decides to fire Powell, Powell would almost certainly appeal, and with insufficient evidence, the courts would likely side with Powell.

For capital markets, this deadlock isn’t good news. The market clearly prefers Wosch taking the top job, because compared with Powell—who always puts “waiting and watching” on his talking points—Wosch may release more signals about rate cuts. In addition, Wosch’s personal closeness to crypto assets could also bring new possibilities to the market.

So for now, everyone is waiting for the outcome of the April 21 hearing. If Wosch is blocked that day, Powell is highly likely to continue running the Federal Reserve as acting chair after May 15, and the standoff between Trump and Powell will likely drag on further.