Kevin Warsh was sworn in as Chairman of the US Federal Reserve Board of Governors on Friday during a ceremony at the White House, with US President Donald Trump describing him as one of the most qualified individuals to lead the country's central bank. According to reports from AFP, Warsh pledged to lead a 'reform-oriented' Federal Reserve, stating he would lead with 'wisdom and clarity, independence and resolve' while upholding clear standards of integrity and performance. The ceremony was unusual as it took place at the White House, with Supreme Court Justices Clarence Thomas and Brett Kavanaugh among those in attendance, administering the oath of office to Warsh. The last central bank chief to be sworn in at the White House was Alan Greenspan in 1987, under President Ronald Reagan, whom Warsh cited as a role model in his speech. Trump made a point of emphasizing 'I want Kevin to be totally independent' during his remarks, stating 'Don't look at me, don't look at anybody. Just do your own thing'. Following the ceremony, Thomas jokingly commented on Warsh's future at the central bank, saying 'Well, he's sworn in!'
Warsh's appointment immediately intensified speculation about the future direction of US monetary policy, particularly on interest rates and the broader functioning of the Federal Reserve. As reported by AFP, Trump has repeatedly made clear that he expects lower interest rates, stating during the swearing-in ceremony that he would be 'disappointed' if Warsh did not move quickly on rate cuts. Although Warsh has previously supported reducing rates, he has denied that Trump pressured him on monetary policy decisions. At his Senate confirmation hearing, Warsh insisted that he would 'absolutely not' be a puppet for Trump, while Trump praised Warsh and said he wanted him to be 'fully independent' before urging the Fed chair to let the economy 'boom'. Treasury Secretary Scott Bessent reinforced Trump's message as he left the ceremony, predicting to reporters that Warsh will 'do the right thing for inflation and growth'. Other Republican figures attending the event, including former Virginia Governor Glenn Youngkin, also declined to speculate on how Warsh might approach rate decisions, with Bessent noting that 'He's going to do the right thing for inflation and growth'. Warsh's appointment comes after months of head-butting between Trump and former Fed Chairman Jerome Powell, with the president having repeatedly criticized Powell over his interest rate policy decisions.
At a Federal Reserve meeting last month, most policymakers indicated that additional rate hikes could still be necessary if inflation remains above the central bank's long-term target. According to AFP, Warsh has argued that productivity gains driven by artificial intelligence-led innovation could allow the US economy to expand rapidly without worsening inflationary pressures. His views have drawn attention as markets assess whether the Fed under his leadership could adopt a different policy trajectory. The US central bank faces a dual mandate to keep inflation to its long-term target of 2% while maintaining maximum employment, with US consumer inflation in April reaching 3.8%, a three-year high, as American households have been battered by years of above-expected price increases since the pandemic. Warsh told Trump that he believes 'these years can bring unmatched prosperity that will raise living standards for Americans from all walks of life' and noted that the Fed's mandate 'is to promote price stability and maximum employment. When we pursue those aims with wisdom and clarity, independence and resolve, inflation can be lower; growth, stronger; real take home pay, higher and America can more prosperous'. Following his swearing-in, Warsh emphasized his commitment to economic growth, stating 'Inflation can be lower, growth stronger and take-home pay can be higher' and adding 'My goal now is to create an environment where the best people can do their best life's work'.
Warsh's appointment has also renewed discussion around the independence of the Federal Reserve from political influence. As reported by AFP, David Wessel, senior fellow at the Brookings Institution, warned that 'Kevin Warsh will not be able to deliver the rate cuts that the president wants' and that 'at some point, the president may grow impatient and will begin attacking Warsh as he did Jerome Powell'. Columbia Law professor Kathryn Judge noted that Warsh takes over at 'a time of disruption and rebalancing in the overall authority of the president'. Potentially adding to Warsh's challenges will be the fact that Powell has chosen to remain on the board as a member — an unusual but not unprecedented move for an outgoing chair, with Powell citing threats to the Fed's independence as his reason for staying. Trump made a point of saying during his remarks that 'in the eyes of many, the Fed has lost its way in recent years' under his predecessor, Democratic President Joe Biden, though he emphasized that 'I want Kevin to be independent and just do a great job'. The leadership change at the Federal Reserve will be closely watched by markets as investors look for signals on inflation, interest rates and the direction of the US economy. During his confirmation hearing last month, Warsh promised to keep the Federal Reserve independent from the executive branch, stating 'I do not believe the operational independence of monetary policy is particularly threatened when elected officials -- presidents, senators or members of the House -- state their views on interest rates'.
Warsh assumes office at a difficult moment for the Federal Reserve, with inflation remaining elevated following the energy price surge linked to Trump's war on Iran, while signs of weakness have begun emerging in the labour market. According to AFP, Trump publicly stated during the ceremony that he wanted Warsh to remain 'fully independent while also encouraging policies that would help the economy expand', stating 'Kevin understands that when the economy is booming, that's a good thing. We want to stop inflation, but we don't want to stop greatness'. The war with Iran has caused gas prices to spike, unsettled financial markets and driven inflation concerns across the economy. Markets are now expected to closely track whether Warsh can balance political pressure for rate cuts with the Fed's long-standing mandate of controlling inflation while preserving institutional independence. Trump noted that the stock market had risen Friday, saying 'That means they like you' of Warsh, while White House economic adviser Kevin Hassett said he hoped Powell would soon 'step aside' so Warsh could 'have complete and easy control of the Fed'. Following the ceremony, Trump was scheduled to travel to Suffern, New York, to campaign for Republican Congressman Mike Lawler ahead of November's elections before heading to his golf resort in Bedminster, New Jersey.
