This week, the situation surrounding the U.S. Federal Reserve has become a bit more interesting. With fewer than 10 days left before Powell’s term ends, the Senate has still not finalized the confirmation of Waller’s nomination, and the market has already priced it in—the odds of Powell remaining on as interim chair are rising.

It’s also quite dramatic, really. Trump originally thought that if he just waited a little longer, Powell would automatically step down when his mid-May term ended, and then Waller would take over—ushering in a rate-cut era. But the problem now is that Waller’s nomination is stuck in the Senate. The April 21 hearing has passed, but a confirmation vote still hasn’t taken place. Republican senator Thom Tillis of the Senate Banking Committee has been blocking it, citing the fact that the Department of Justice’s investigation into Powell is not yet finished.

That investigation itself is quite interesting. Last July, Trump visited the Federal Reserve building renovation site and raised questions about the budget, after which the Department of Justice opened an investigation. However, according to a report by The Washington Post in March this year, the Department of Justice has not found any evidence of wrongdoing so far. In other words, the investigation has basically made no real progress, yet it has become the reason Tillis cites for blocking Waller’s nomination.

Of course, Trump isn’t happy. In an interview on April 15, he said that if Powell doesn’t step down on time, he will fire him, and he also won’t drop the investigation. But this may just be a verbal threat. Under U.S. law, the president needs a legitimate reason to fire the Fed chair—you can’t do it just because of policy differences. And right now, there simply isn’t enough evidence to support firing Powell; ultimately, it would come down to the courts.

What’s interesting is that Federal Reserve law provides that if a successor is not confirmed, the incumbent chair can continue serving as interim chair. There’s historical precedent as well. During the Clinton era, Greenspan, after his term ended, did something similar and served for more than three additional months. Powell himself went through a comparable situation in 2022.

From the perspective of capital markets, this situation isn’t good news for the crypto market. The market is clearly more eager for Waller to take office, because of his pro-crypto stance and the expectation that he may signal more rate cuts. By contrast, Powell—who has kept saying “we’ll wait and see”—isn’t as well regarded. If Powell ends up holding the reins of the Federal Reserve for a few more months, for those assets that are betting on rate cuts and looser policy, the short-term outlook could face more uncertainty.

So the key now is whether the Senate will actually move forward with the confirmation vote for Waller. Although the power struggle between Trump and Powell looks intense, the final say still rests with Congress. Over the next few days, we should see more developments, and the market is closely watching—because this directly affects the future direction of Federal Reserve policy, and in turn affects the entire financial market.