Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios Pro Rata

Dive into the world of dealmakers across VC, PE and M&A with Axios Pro Rata. Delivered daily to your inbox by Dan Primack and Kia Kokalitcheva.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Nashville news?

Get a daily digest of the most important stories affecting your hometown with the Axios Nashville newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Columbus news?

Get a daily digest of the most important stories affecting your hometown with the Axios Columbus newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Dallas news?

Get a daily digest of the most important stories affecting your hometown with the Axios Dallas newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Austin news?

Get a daily digest of the most important stories affecting your hometown with the Axios Austin newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Atlanta news?

Get a daily digest of the most important stories affecting your hometown with the Axios Atlanta newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Philadelphia news?

Get a daily digest of the most important stories affecting your hometown with the Axios Philadelphia newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Chicago news?

Get a daily digest of the most important stories affecting your hometown with the Axios Chicago newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top DC news?

Get a daily digest of the most important stories affecting your hometown with the Axios DC newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

There are those speculating whether Fed chair Jerome Powell gets another term. Then there are those speculating with real money on the line.

Why it matters: The explosion in retail trading is one sign of the flush consumer's betting fervor. The amped up rush to wager on political outcomes — like who's next to lead the Fed — is another.

Here’s an indicator that interest in political betting has heated up: Per data provided to Axios by PredictIt, cumulative trading activity for the next Fed chair is double what it was the last time there was a similar market on the political trading platform.

  • That was in 2017, when then-Fed chair Janet Yellen was up for renomination. (At this point then, Powell led the market, though Kevin Warsh was ahead a few days prior.)

The big picture: PredictIt is the site most closely watched by traders, as far as prediction markets go.

  • Those platforms are valuable because in real-time, it "distills the consensus into a single number," says Bianco Research's Jim Bianco, who regularly tweets out updates on the Fed chair betting market. (Bianco isn't trading here, though he has been active on PredictIt before.)
  • For instance, buying in on Powell's renomination costs 73 cents (and if you're right, you win $1 — less fees). Put another way, the prediction market sees a 73% chance Powell gets another four years.

Worth noting: The Commodity Futures Trading Commission has strict rules for political trading platforms like PredictIt, which fall under the regulator’s purview.

  • One of them: No user can put more than $850 on a single contract — a "yes" or "no" on a certain political outcome — and just 5,000 people can hold shares in any contract at one time.
  • In other words, mega-bets on the next Fed chair aren't happening on PredictIt. That happens elsewhere, indirectly (like interest rate futures).

The backdrop: Powell’s term expires in February. Biden hasn’t said whether he‘ll re-up Powell — who isn’t favored among progressives — for a second term.

  • His chances slumped amid vocal opposition in Washington that’s gotten louder since the scandal over some Fed members' financial holdings, PredictIt shows.
  • The most active trading day since this market's inception on PredictIt was when Sen. Elizabeth Warren (D-Mass.) said earlier this month she would not support a Powell renomination. The second most active day? Last week, when Warren doubled down.
  • Powell still has the best odds, but they are off their highs. Contracts on Lael Brainard, who currently serves on the Fed board, spiked. Other names — like former TIAA CEO and a one-time Fed vice chairman Roger Ferguson — have recently come into the fold.

Between the lines: “There are times when what’s going on in prediction markets doesn’t seem totally consistent with other markets where people are putting billions of dollars to work,”says Jens Nordvig, who previously led fixed income and currency strategy at Nomura before founding his own firm, Exante Data.

  • In the case of the Fed chair, though, “people’s probabilities have shifted, and that’s reflected in PredictIt, and also reflected in how people think about what are the risks to interest rates,” says Nordvig, who notes those moves can happen in tandem.

What to watch: An announcement on Powell’s fate is due any day now, if history is any guide: The last three presidents didn't unveil Fed head decisions later than October or November.

  • Biden's announcement will end the suspense, but it won't trigger winnings for prediction market traders. That only happens when the Senate OKs the pick, because of the way the question that the market's built on is phrased: "Whom will the Senate next confirm as Chair of the Federal Reserve?"

Editor's note: This story has been corrected to reflect Roger Ferguson was the former TIAA CEO, not chairman.

Go deeper

What's next for the Fed on climate change

Photo illustration: Annelise Capossela/Axios. Getty Images photos: Andrew Caballero-Reynolds/AFP and Lev Radin/Pacific Press/LightRocket

The Federal Reserve is poised to increase its climate focus even as President Biden's nomination of Chairman Jerome Powell to a second term disappointed advocates of policies to tilt the economy away from fossil fuels.

Catch up fast: Biden on Monday announced Powell's nod and said he's tapping Lael Brainard — a Fed board member who's outspoken on climate — as vice chair.

Nov 22, 2021 - Politics & Policy

Biden's Fed pick puts progressives on notice

Powell and Biden. Photo: Alex Wong/Getty Images

President Biden's nomination of Jerome Powell for a second term as chairman of the Federal Reserve shows Biden's willingness to stare down progressives to get his cherished Build Back Better legislation through the Senate and into law.

Why it matters: Inflation is threatening Biden’s $2 trillion social spending and climate package, and Biden wants to save his political capital with moderates for that fight.

What to watch in the Fed's new era

President Biden with Jerome Powell and Lael Brainard at a press conference Monday. Photo: Jim Watson/AFP via Getty Images

There's a new era at the Fed: Jerome Powell will keep the top job, Lael Brainard will step up as No. 2 — with more fresh faces set to come.

Why it matters: Prices are rising at the fastest pace in 30 years with millions still out of work. What Biden's Fed picks do may be felt by everyday Americans.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!