Washington, DC

1. DOJ ends Powell probe
2. Witkoff, Kushner to Pakistan
3. Johnson’s math problem
4. Prediction market crackdown
5. WHCD irony

Dropping Powell probe sent short-term Treasury yields ▼ to 3.78%.

DOJ drops Powell probe, clearing way for Warsh

The Department of Justice dropped its criminal investigation of Federal Reserve Chair Jerome Powell that was holding up the nomination of President Donald Trump’s pick to replace him, Kevin Warsh. Instead, the Fed’s inspector general will conduct an inquiry into construction at the central bank’s headquarters. The news comes less than 24 hours after Trump said he’d be open to other venues for a probe, an idea floated by Republican senators and Treasury Secretary Scott Bessent to accommodate Sen. Thom Tillis, R-N.C, who had vowed not to vote for Warsh in committee until the probe ended. Asked by Semafor’s Eleanor Mueller at the White House if someone outside the Justice Department could get the answers he sought, Trump said: “[They] could. I mean, look, it’s pretty easy.” Republican senators want to move quickly on Warsh: Powell’s term as chair ends May 15.

Trump ratchets up economic pressure on Iran

Steve Witkoff and Jared Kushner are heading to Pakistan for another round of peace talks, as the Trump administration ratchets up economic pressure on Iran. Today the Treasury Department extended new sanctions that target a Chinese refinery, which the administration called one of Iran’s biggest customers, and 40 shipping firms associated with Iran’s shadow fleet. Defense Secretary Pete Hegseth vowed this morning to keep the military blockade of the Strait of Hormuz in place for “as long as it takes.” The Navy has gotten more aggressive with the shadow fleet, too: A destroyer chased down an Iranian-flagged ghost ship this week in the Indian Ocean. The strait remains effectively closed, driving up global energy prices and testing which side can endure the most pain. When asked about timing yesterday, Trump replied sharply to a reporter: “Don’t rush me.”

Speaker Johnson’s math problem

Speaker Mike Johnson’s got a math problem. In recent weeks, three lawmakers resigned amid scandal (two Democrats, one Republican), a Democrat died, a Republican, Rep. Tom Kean Jr. of New Jersey, has been out sick, and a Republican, Rep. Kevin Kiley of California, switched to an independent. That’s left Johnson’s best-case margin right now at 218 to 212, assuming full attendance, and Kiley votes with the conference. So even if Kean returns soon, Johnson cannot lose more than two votes. He could end up down another vote if embattled Rep. Cory Mills, R-Fla., under pressure to resign, is expelled. Next week Johnson wants to pass funding for the Department of Homeland Security, reauthorize surveillance powers, and move a massive package of agricultural and nutrition legislation, but he has very little wiggle room to do so.

— Nicholas Wu

Prediction market bets haunt politicos

Prediction market trades are coming back to haunt political insiders. Yesterday the Justice Department arrested a US Special Forces Army sergeant, accusing him of using classified information about the Nicolás Maduro operation to make $400,000 on Polymarket. On Wednesday Kalshi suspended and fined three congressional candidates, claiming they made bets on their own campaigns. One of the candidates, Mark Moran, a former reality TV star running for Senate in Virginia, told Semafor’s Rohan Goswami that he was caught by design — to show how these platforms “can be manipulated by the highest bidder/donor to move a market which will sway voters.” Meanwhile, anonymous users have made a number of well-timed bets on highly-specific events tied to the war in Iran. The idea of regulating the platforms is gaining interest on Capitol Hill, but lawmakers have yet to coalesce around any single proposal.

When journalists hire a deception artist

The media elite will gather at the Washington Hilton tomorrow to listen patiently to a powerful man with a complicated relationship to the truth. The president will also be in attendance. Deferring to Trump’s dislike of mockery, the White House Correspondents’ Association has traded out the usual comic for a “mentalist” as the night’s featured entertainment. Oz Pearlman’s line of work — dazzling, highbrow trickery — is curiously at odds with journalists’. Fortunately for everybody, perhaps, the president is expected to deliver such a heated invective that he’ll leave little space for the subtler irony.

— Josh Billinson

White House

• Ousted head of the Navy, John Phelan, couldn’t deliver new battleships President Trump wanted by 2028, a nearly impossible timeline. — NYT
• The White House has loosened rules for maintaining presidential records.

Justice Department

• Acting Attorney General Todd Blanche is advancing high-profile Justice Department investigations into President Trump’s adversaries, including former CIA director John Brennan. — NYT
• Blanche reauthorized the use of firing squads today as part of a broader DOJ effort to revive the death penalty.

Politics

• In a new poll, Americans blame President Trump for rising gas prices. — Reuters
• King Charles is expected to meet with New York Mayor Zohran Mamdani during his visit to the US next week.

Courts

• A federal appeals court found that President Trump’s declaration of an “invasion” at the US-Mexico border was illegal, reopening the crossing to migrant asylum seekers.

World

• The US and EU announced a joint plan of action to coordinate trade policy and other measures to bolster critical minerals supply chains.
• Israeli Prime Minister Benjamin Netanyahu said he hid his treatment for prostate cancer because of the war in Iran.

Tech

• The US stake in Intel has jumped to $36 billion. — Bloomberg
• Google intends to invest $40 billion in AI-giant Anthropic. — Bloomberg

— Karoline Leavitt, White House press secretary, at her final press gaggle before going on maternity leave.

Semafor DC Team

Laura McGann, editor

With help from Elana Schor, senior Washington editor, and Morgan Chalfant, Washington briefing editor

Brendan Ruberry, copy editor

Contact our reporters:

Burgess Everett, Eleanor Mueller, Shelby Talcott, Nicholas Wu, David Weigel