Insights 
VT 
Rumours circulated about Jerome Powell resigning as Federal Reserve Chair on Monday, with suggestions also suggesting that Donald Trump plans to lower interest rates. These claims are seen as baseless, aiming to influence Bitcoin trading.
There is no evidence supporting these rumours. Powell has committed to serving until his term concludes in May 2026, and recent legal decisions have limited Trump’s ability to dismiss him. Comments from Federal Reserve officials indicate that interest rates are likely to remain steady for the upcoming meeting.
Speculative Attempts
These rumours, which gained traction early in the week, appear to be speculative attempts to sway pricing in yield-sensitive markets. While highly topical in social forums and among retail-focused commentaries, they lack support from any official channel or verifiable source. Powell’s current term has been publicly set to continue through mid-2026, and the courts have constrained executive powers to remove central bank appointees unilaterally. That framework now puts long odds on any abrupt restructuring of the Fed during this administration or the next.
Clarida, in previous cycles, noted the importance of perceived Fed independence – and any credible shift away from this would reflect immediately in Treasury futures. Yet that hasn’t happened. The two-year note traded inside its average range and options skew has not priced in volatility from leadership uncertainty. That leads us to dismiss the rumour mill for now as background noise.
For those operating in rate-sensitive derivatives, clarity lies in the minutes and vocal signals from the current FOMC configuration. Jefferson and Waller, speaking at official venues, both implied that current levels of inflation are not soft enough to warrant any short-term policy reversal. With Powell’s leadership intact and legal constraints surrounding his removal clear, max pain scenarios that would benefit steepeners appear unsubstantiated at present.
Positioning Strategy
What matters more is positioning through the next CPI release and how implied vols shift ahead of the Fed watch window. We’re still seeing LDI flows parked around the belly of the curve, while gamma has remained offered across most rate expiration ladders. If anything, caution up the curve has led to softness in collars and wings – suggesting participants do not see a left-field repricing coming from personnel shocks. That’s telling, and worth tracking.
This week’s contracts show that carry remains intact unless revised dot projections force a repricing. That hasn’t happened yet. So as pricing continues to hinge primarily on hard data, not headlines, we must be alert to skew discounting deeper hikes – but only when probability is tied to published indicators. Until then, short flies and mid-curve vol fades still make sense.
