What the End of the DOJ Investigation Means for the Next Fed Chair

Summary

WSJ What’s News – April 24, 2026

Episode Title: What the End of the DOJ Investigation Means for the Next Fed Chair
Host: Alex Osoleff (Wall Street Journal)
Main Guests: Nick Timoros (WSJ Chief Economics Correspondent), Drew Fitzgerald (WSJ Defense Reporter), Catherine Sayre (WSJ Entertainment Reporter), Caroline Levitt (White House Press Secretary)

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Episode Overview

This episode centers on the Justice Department’s closure of its criminal investigation into Federal Reserve Chair Jerome Powell, unpacking the political maneuvering and implications for President Trump’s planned nominee for the next Fed Chair, Kevin Warsh. The hosts also explore updates on US-Iran-Pakistan diplomatic efforts, the defense industry’s financial paradox amid ongoing conflict, new milestones in AI and technology markets, and the unlikely success of the Las Vegas Sphere.

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Key Discussion Points & Insights

1. End of DOJ Probe Into Jerome Powell and Fed Politics

[01:03]–[03:24]

• Main News: DOJ ends its criminal investigation into Fed Chair Jerome Powell, which centered on Powell’s Congressional testimony regarding cost overruns on Fed building renovations.
• Political Context: The probe was a stumbling block to confirming Trump’s new Fed Chair pick, Kevin Warsh.
  • Trump had previously pushed for the investigation, questioning why a $25 million project ballooned to billions.
  • Powell suggested the probe was politically motivated, aimed at pressuring the Fed on interest rates.

Notable Quotes:

• Nick Timoros [02:09]:

  “Donald Trump's choice to run the Federal Reserve…was not going to get confirmed by the United States Senate until this happened. Either Thom Tillis…was not going to vote for any Fed nominee until this probe goes away, or Donald Trump…was happy to see this probe continue. One of them was going to have to back down. And today we saw that it was going to be Donald Trump.”

• Nick Timoros [02:41]:

  “It’s not clear [if Warsh’s confirmation is guaranteed] … Janine Pirro…said she was closing the probe…But then she also said she wouldn’t hesitate to restart a criminal investigation should the facts warrant doing so. … So we’re just going to have to wait and see how final this truly is.”

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2. US-Pakistan-Iran Diplomatic Developments

[03:25]–[04:22]

• Iranian Foreign Minister in Islamabad: No direct meetings planned with American officials yet.
• US Response: Special envoy Steve Witkoff and Jared Kushner (Trump’s son-in-law) will travel to Pakistan for talks with Iranian representatives.
• White House Position: Willingness to pursue diplomacy, with VP J.D. Vance on standby.

Notable Quotes:

• Caroline Levitt [03:54]:

  “The Iranians want to talk. They want to talk in person. And so the president is…always willing to give diplomacy a chance.”

• Caroline Levitt [04:14]:

  “The vice president…I understand, is on standby and will be willing to dispatch to Pakistan if we feel it’s a necessary use of his time.”

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3. Defense Industry’s Posture Amid War with Iran

[05:12]–[07:44]

• Paradox for Investors: Missile and weapon demand is soaring, but stock prices for key defense contractors (RTX, Northrop Grumman, Lockheed Martin) fell over 10% since the start of the Iran war.
• Reasons for Market Skepticism:
  • These companies rely on both defense and commercial aviation markets; the latter is struggling.
  • Concerns that major investments to expand weapon production will take precedence over stock buybacks/dividends.
  • Congressional pushback on the Trump administration’s expanded military budget ($1.5 trillion).

Notable Quotes:

• Drew Fitzgerald [05:54]:

  “A lot of these defense focused companies are hybrids of commercial and military technology…And that is a market that is threatened not only by direct conflict…but by high jet fuel prices.”

• Drew Fitzgerald [06:45]:

  “…there’s been a lot of focus on the massive amount of very high end tactical missiles and defensive interceptors…these are very expensive weapons. They take more than two years to make…it requires a lot of investment and a lot of time to address the American demand…”

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4. Markets, AI, and Tech Industry Moves

[07:46]–[10:21]

• Stock Market Highlights:
  • Nasdaq up 1.6% (record high), S&P up 0.8% (record), Dow down 0.2%.
  • Intel’s stock surges 24% after strong earnings and lifted outlook—first record since 2000.
  • X Energy, a nuclear startup, debuts and soars 27% on AI-driven electricity demand.
• AI Industry News:
  • Google (Alphabet) plans up to $40 billion investment in Anthropic, with Anthropic raising $65 billion in commitments ahead of an IPO.
  • China’s Deep Seq releases a new open source AI model; fundraising prospects may hinge on performance.
  • Thrive Capital (Joshua Kushner) invests in the San Francisco Giants as part of a strategy to back “franchises and cultural institutions that can’t be replicated by AI.”
• Automotive Tech:
  • Ford and Geely held recent US talks, now focused on European tech partnerships.

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5. Las Vegas Sphere’s Transformation to Success Story

[10:21]–[11:43]

• Initial Challenges: The Sphere opened to skepticism—cost overruns, delayed construction, and safety concerns.
• Turnaround: It has become the highest grossing arena globally, selling $379 million in tickets last year.
• Expansion Plans: Sphere Entertainment aims to replicate its immersive dome in Abu Dhabi and build a smaller version at National Harbor near D.C.

Notable Quotes:

• Catherine Sayre [10:21]:

  “This idea of building a giant 17,000 seat dome near the Strip puzzled a lot of people. It turns out it works just because the technology is so immersive. This dome envelops you. There's a screen that's one of the highest resolution screens in the world…people just enter a whole different world.”

• Catherine Sayre [11:02]:

  “Now that they have this model, they can, you know, bring the same content to all of these other spheres…They have a deal in Abu Dhabi…plans for a smaller scale 6,000 seat Sphere at National Harbor…CEO James Dolan has said they could handle as many as five or six construction projects at a time.”

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Notable Moments & Timestamps

| Time | Segment/Quote | |-----------|----------------------------------------------------------------------------------------------| | 02:09 | Nick Timoros analyzes the Senate confirmation dynamics and DOJ probe reversal | | 02:41 | Nick Timoros discusses the open-ended conclusion to the probe | | 03:54 | White House spokesperson on US pursuit of renewed diplomacy with Iran | | 05:54 | Drew Fitzgerald explains why war isn’t an automatic windfall for defense stocks | | 06:45 | Explanation of production timelines and investment hurdles for advanced US missiles | | 10:21 | Catherine Sayre describes the “immersive” tech behind the Las Vegas Sphere phenomenon | | 11:02 | Sphere’s global expansion strategy, according to CEO James Dolan (via Sayre) |

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Summary in the Words of the Episode

• The episode captures the dramatic unwind of a political standoff over Fed Chair succession, as described by Nick Timoros:

  “One of them was going to have to back down. And today we saw that it was going to be Donald Trump.” [02:09]

• The mood on Iran negotiations is cautious but pragmatic, articulated by Caroline Levitt:

  “Always willing to give diplomacy a chance.” [03:54]

• Despite headline war spending, Drew Fitzgerald observes:

  “…Not winning over investors.” [05:12]

• On the Sphere’s unlikely success, Catherine Sayre muses:

  “It turns out it works just because the technology is so immersive.” [10:21]

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Conclusion

The episode delivers a brisk, thorough analysis of pivotal developments: the political calculus behind the DOJ’s Fed probe, the shifting sands of US-Iran diplomacy, market skepticism toward defense contractors despite strong demand, surging AI investment activity, and the Las Vegas Sphere’s technological “leap.” Each segment is enriched with expert analysis and direct quotes, making the episode both timely and comprehensive for business and market watchers.

Transcript

[Miriam Gottfried]

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[Alex Osoleff]

The Justice Department drops its probe of Fed Chair Jerome Powell. We'll get into what that means for Trump's pick for the next head of the Fed. Plus, U.S. officials are heading to Pakistan for more talks with Iran. And it may have had a rocky start, but now the Las Vegas sphere is the highest grossing arena in the world.

[Catherine Sayre]

This idea of building a giant 17,000 seat dome near the Strip puzzled a lot of people. It turns out it works just because the technology is so immersive.

[Alex Osoleff]

It's Friday, April 24th. I'm Alex Osoleff for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world today. The Justice Department said today that it would end its criminal investigation of Federal Reserve Chair Jerome Powell. The probe involved Powell's testimony to Congress about cost overruns on the renovation of two historic Fed buildings. Trump was insisting on the investigation just a few days ago during an interview on cnbc. We have to find out why is a job that should have cost $25 million costing billions and billions of dollars. Trump has also threatened to fire Powell, who has said the investigation was actually about pressuring the Fed over interest rates. Our chief economics correspondent Nick Timoros joins me now to talk about the end of the investigation and what it means for President Trump's pick for the next Fed chair, Kevin Warsh. Nick, this announcement comes just days after U.S. attorney Janine Pirro said publicly she intended to press on with the case. Why the reversal?

[Nick Timoros]

Because Donald Trump's choice to run the Federal Reserve beginning in three weeks was not going to get confirmed by the United States Senate until this happened. Either Thom Tillis, the Republican senator who has said he will not vote for any Fed nominee until this probe goes away, or Donald Trump, who had been happy to see this probe continue. One of them was going to have to back down. And today we saw that it was going to be Donald Trump.

[Alex Osoleff]

As you say, the probe had been the main obstacle for Kevin Warsh to be confirmed as Fed chair to succeed. Powell is his confirmation now essentially a guarantee.

[Nick Timoros]

It's not clear because Jeanine Pirro, the federal prosecutor, did two things. First, she said she was closing the probe and allowing an already in the works review by the Fed's inspector general to take the place of what she had been doing. But then she also said that she wouldn't hesitate to restart a criminal investigation should the facts warrant doing so. And there was that disclaimer that has led some people to say, well, wait a minute, is this really over? And so we're just going to have to wait and see what everybody has to say about how final this truly is.

[Alex Osoleff]

That was WSJ chief economics correspondent Nick Timoros.

[Catherine Sayre]

Thanks, Nick.

[Nick Timoros]

Thanks so much.

[Alex Osoleff]

A Fed spokeswoman today declined to comment. Iran's foreign minister arrived in Islamabad today to meet with Pakistan's senior leadership. An Iranian state news agency said that he doesn't currently plan to hold talks directly with American delegates. Still, the White House is sending special envoy Steve Witkoff and President Trump's son in law, Jared Kushner to Islamabad for talks with Iranian officials. Here's White House press secretary Caroline Levitt.

[Caroline Levitt]

The Iranians want to talk. They want to talk in person. And so the president is, as I've said many, many times to all of you, always willing to give diplomacy a chance. So Steve and Jared will be heading to Pakistan tomorrow to hear the Iranians out.

[Alex Osoleff]

Vice President J.D. vance will stay in Washington, but if talks make progress, Levitt said the president may send him, too.

[Caroline Levitt]

The vice president, I understand, is on standby and will be willing to dispatch to Pakistan if we feel it's a necessary use of his time.

[Alex Osoleff]

Coming up, defense companies have been making money selling missiles during the Iran war. But to keep making it, they may have to spend more, too. That's after the break.

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[Alex Osoleff]

Given that there's a war going on, you'd think it would be a good time to be a weapons manufacturer. Demand for sophisticated missiles and other weapons has risen, boosting sales for defense contractors. But that's not winning over investors. Shares of major aerospace and defense companies rtx, Northrop Grumman and Lockheed Martin have all fallen more than 10% since the war with Iran began, including a sell off this week as they reported earnings. Drew Fitzgerald covers the defense industry for the Journal and joins me now. Drew, we've reported that the US Is burning through its weapons stockpile. That seems like it would be great news for weapons makers who are needed to help restock. But your reporting suggests the situation is more of a double edged sword. What's the concern here?

[Drew Fitzgerald]

A lot of these defense focused companies are hybrids of commercial and military technology. Even if they're selling a lot of hardware to the US Military and to its allies, they're also selling maintenance services, parts, all sorts of things to airlines. And that is a market that is threatened not only by direct conflict in the Middle east, but by high jet fuel prices. And another factor is that in some cases Northrop Grumman and others have been selling off a bit on concerns that the companies themselves will need to make big investments to adequately serve the programs that they're addressing. Investors would prefer that a lot of free cash go to stock buybacks and to dividends.

[Alex Osoleff]

So can defense manufacturers meet the demand that the US Military is asking for?

[Drew Fitzgerald]

Well, it really depends on the type of weapon that you're talking about. There's been a lot of focus on the massive amount of very high end tactical missiles and defensive interceptors that the US and its Gulf allies have expended just over the past few weeks. These are very expensive weapons. They take more than two years to make and it requires a lot of investment and a lot of time to address the American demand for those weapons, not to mention allies overseas. Another thing I'd mention is that big defense companies make most of their revenue from very, very expensive platforms like fighters, bombers and the like. And even though spending appears to be rising on some of those programs, they there's pushback in Congress to this massive $1.5 trillion military budget that the Trump administration has proposed. So that's also in investors minds as they think about where these defense companies will be going for the long haul.

[Alex Osoleff]

That was Journal reporter Drew Fitzgerald. Thanks so much, Drew.

[Drew Fitzgerald]

Thanks for having me.

[Alex Osoleff]

The Nasdaq climbed 1.6% today and closed at a record high. It got a big boost from intel, which soared 24%. It was a huge day for the chip company, which closed at a record high, Intel's first since 2000. More than two decades ago, intel yesterday afternoon reported higher sales and raised its outlook. Other trading was mixed, with the S and P rising 0.8% and closing at its own record, while The Dow slipped 0.2%. And we have several updates related to AI. Today, shares of X Energy closed up 27% in the company's stock market debut. The nuclear energy company is benefiting from AI's big need for electricity, but X Energy is still years away from completing a nuclear reactor. Speaking of AI, Alphabet's Google plans to invest as much as $40 billion in Anthropic. Anthropic has secured up to $65 billion in new funding commitments this month, ahead of its own potential ipo. And the Chinese AI lab Deep Seq has released a new open source AI model. How well it performs could affect how investors value the startup. It's been seeking its first round of external funding, but in San Francisco, the Giants baseball team has a new investor in VC firm Thrive Capital. Thrive, founded by Joshua Kushner, Jared Kushner's brother, has a new strategy and wants to make investments in franchises and cultural institutions that can't be replicated by AI. Separately, we're exclusively reporting that Ford and Chinese automaker Geely held talks as recently as this year about a US Deal. Discussions involved Ford potentially licensing Geely's technology in the US but they've stalled in recent months. The two sides instead are focused on a deal to share technology and manufacturing capacity in Europe. Geely is eager to expand in the US Market, where Chinese automakers are effectively banned, but it faces major hurdles to doing so. When the Sphere opened in Las Vegas three years ago, it had all the signs of impending disaster. Its construction was nearly $1 billion over budget, years behind schedule. When it finally did open, some drivers complained that it was creating hazardous driving conditions, either because people were stopping to take pictures of it or because the images distracted them. But now the Sphere is the highest grossing arena in the world, according to OpenStar. It sold $379 million worth of tickets last year. Our Catherine Sayre covers entertainment and joins. We know. Okay, Catherine, I'm going to level with you. I don't get it. I don't understand the obsession with the Sphere. Why are people so into it?

[Catherine Sayre]

Well, I think you're not the only one who didn't get it at first. This idea of building a giant 17,000 seat dome near the Strip puzzled a lot of people. It turns out it works just because the technology is so immersive. This dome envelops you. There's a screen that's one of the highest resolution screens in the world. The sound is designed to go directly to your ears, and so people just enter a whole different world.

[Alex Osoleff]

So now it looks like Sphere Entertainment, the public company behind Sphere, is expanding and potentially building some other spheres across the world. What are some places they're considering and why are they looking at this?

[Catherine Sayre]

The Sphere is so expensive to run. Now that they have this model, they can, you know, bring the same content to all of these other spheres they have in mind. So they have a deal in Abu Dhabi to bring essentially a replica of the Las Vegas location there. And they have announced plans for a smaller scale 6,000 seat sphere at National harbor outside of D.C. sphere's CEO James Dolan has said they could handle as many as five or six construction projects at a time and that they're pursuing just basically as many as they can.

[Alex Osoleff]

That was Wall Street Journal reporter Catherine Sayre. Thanks, Catherine.

[Catherine Sayre]

Thank you.

[Alex Osoleff]

And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up what's news in markets? Then on Sunday, we'll be talking with a certified divorce financial analyst about what it takes to plan for your divorce before you even get married. That's in what's New Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Danny Lewis and Pierre Bienname with supervising producer Tali Arbel. Michael Lavalle wrote our theme music. Aisha El Musleam is our development producer. Chris Zinsley is our deputy editor. And I'm Alex Osola. Have a great weekend and thanks for listening. Hey, this is Telus Demos and I'm Miriam Gottfried. We're reporters at the Wall Street Journal and The hosts of WSJ's take on the Week. It's a weekly show that gives listeners a leg up in the world of markets.

[Miriam Gottfried]

And from the Fed's moves to market bubbles, we dive into the biggest deals, key players and business news ahead.

[Alex Osoleff]

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[Miriam Gottfried]

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[Alex Osoleff]

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