click below to login to your secure account
By Scott McIntyre, CFA
Co-Head of Investment Management
HilltopSecurities Asset Management
Jeanine Pirro, the U.S. Attorney for the District of Columbia, announced today that the Justice Department will end its controversial criminal investigation into Fed Chair Jerome Powell over alleged cost overruns on renovations of central bank headquarters. The renovation inquiry will now transition to the Fed’s inspector general, reframing the issue as an internal matter rather than a criminal probe.
Senator Thom Tillis (R-NC) had pledged to withhold his confirmation vote on the appointment of Kevin Warsh as Powell’s successor until the DOJ investigation was dropped. Thus, today’s announcement should serve to break the deadlock and clear the path forward.
Kevin Warsh appeared before the Senate Banking Committee earlier this week, answering questions that focused predominantly on Fed independence. Lawmakers questioned Warsh on whether he would feel pressure from the Trump administration to cut rates if confirmed. Warsh responded, saying the president had never asked him to commit to rate cuts, while further stating that he would not have agreed to do so.
At this point, it’s reasonable to expect Warsh to be confirmed as Fed governor, replacing temporary governor Stephen Miran. Warsh would then assume the chair position for the next FOMC meeting on June 16-17. It’s also likely that Jerome Powell will now leave the Fed after his term as chairman ends on May 15, making next week’s FOMC meeting potentially his last. Powell had threatened to serve out the remainder of his term as Fed governor, voting at each FOMC meeting through January 2028, inherently denying the president an additional nominee.
Although today’s announcement seems to be a win for ongoing Fed independence, Powell’s now likely departure should assure a more dovish governor will be appointed in his place, increasing the odds of future rate cuts.
Both stocks and bonds are rallying this afternoon (yields lower). The expectation for more accommodative monetary policy is a likely factor in the rally, along with today’s announcement by the White House that Jared Kushner and Steve Witkoff will meet in Pakistan this weekend for a fresh round of negotiations on ending the conflict in Iran, although Iranian officials have denied involvement in any scheduled talks.
About Scott McIntyre, CFA
As HilltopSecurities Asset Management’s Co-Head of Investment Management, Scott McIntyre specializes in investment management services and is responsible for the management, oversight and trade supervision of more than $30 billion in institutional fixed income assets for HilltopSecurities’ public sector municipal clients. Scott also provides investment advice and consulting, reviews local government investment policies, formulates overall investment strategies, evaluates account performance and oversees the day-to-day operations. He is a member of the Chartered Financial Analyst (CFA) Institute and a CFA Charterholder, a two-term advisor to the GFOA Treasury and Investment Management (TIM) committee, a Registered Investment Advisor, and holds FINRA Series 7, 24, 63, and 65 licenses.
About Greg Warner, CTP
As HilltopSecurities Asset Management’s Co-Head of Investment Management, Greg Warner specializes in investment management services and is responsible for the management and oversight of more than $30 billion in institutional fixed income assets for HilltopSecurities’ public sector municipal clients. Greg coordinates all client services and portfolio management duties, including security evaluation and portfolio analysis, trading, investment reporting, board presentations, and monitoring of broker-dealer relationships. He is an advisory committee member to the Texas Association of Counties, a member of the Government Treasurers’ Organization of Texas (GTOT), a Registered Investment Advisor, a Certified Treasury Professional (CTP) and holds FINRA Series 7, 63, and 65 licenses.
About Matt Harris, CFA
As HilltopSecurities Asset Management’s Senior Portfolio Advisor, Matt Harris specializes in investment management services for public sector municipal clients. He developed his experience in the banking industry, supporting balance sheet management, interest rate risk analysis, liquidity planning, and investment strategy implementation. At HilltopSecurities, he works closely with clients to develop and implement customized investment strategies, oversees account documentation and reporting, and assists clients with the public funds depository review process, including competitive RFP evaluations. Harris is a member of the CFA Institute and a CFA Charterholder, a Registered Investment Advisor, and holds FINRA Series 7, 63, and 66 licenses.
The paper/commentary was prepared by HilltopSecurities (HTS). It is intended for informational purposes only and does not constitute legal or investment advice, nor is it an offer or a solicitation of an offer to buy or sell any investment or other specific product. Information provided in this paper was obtained from sources that are believed to be reliable; however, it is not guaranteed to be correct, complete, or current, and is not intended to imply or establish standards of care applicable to any attorney or advisor in any particular circumstances. The statements within constitute the views of HTS as of the date of the document and may differ from the views of other divisions/departments of Hilltop Securities Inc. and its affiliates. In addition, the views are subject to change without notice. This paper represents historical information only and is not an indication of future performance. This material has not been prepared in accordance with the guidelines or requirements to promote investment research, it is not a research report and is not intended as such. Sources available upon request.
Hilltop Securities Inc. is a registered broker-dealer, registered investment adviser and municipal advisor firm that does not provide tax or legal advice. HTS is a wholly owned subsidiary of Hilltop Holdings, Inc. (NYSE: HTH) located at 717 N. Harwood St., Suite 3400, Dallas, Texas 75201, (214) 859-1800, 833-4HILLTOP.