Kevin Warsh was sworn in as the new chairman of the Federal Reserve by Supreme Court Justice Clarence Thomas during a White House ceremony Friday.
Warsh, 56, previously served on the Fed’s Board of Governors from 2006 to 2011 and became the youngest Fed governor, appointed at the age of 35. Trump nominated Warsh to the post in January, and he was confirmed by the Senate last week by a vote of 54-45.
Warsh takes over as head of the country’s central bank at a pivotal time, as inflation rises due to an energy price shock caused by the war in Iran and markets view the prospect of interest rate cuts as increasingly unlikely in the near term.
Kevin Warsh became the 17th chairman of the Federal Reserve on Friday. (Graeme Sloan/Bloomberg via Getty Images)
He replaces the former chairman of the Fed Jerome Powellwhose term as president expired earlier this month. Powell indicated that he will continue to serve on the Fed’s Board of Governors for the foreseeable future, as his term in that capacity runs until January 2028.
Powell said he will not be the “shadow chairman of the Fed” and will seek to build consensus with Warsh and other members of the Federal Open Market Committee, which sets monetary policy, when possible.
Kevin Warsh succeeds Jerome Powell as head of the Federal Reserve. (Kevin Lamarque/Reuters)
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Warsh’s nomination was delayed in the Senate because Sen. Thom Tillis, R-N.C., delayed the nomination due to his concerns about the Justice Department’s investigation into Powell’s testimony on the Fed’s costly overhaul project and the implications for the central bank’s independence — as Trump urged Powell to cut interest rates and threatened to fire him.
Tillis released his grip after U.S. Attorney for the District of Columbia Jeanine Pirro closed her office’s investigation, and Fed Inspector General Michael Horowitz took over. This allowed his nomination to move from the Senate Banking Committee to the Senate.
Senate Banking Committee Chairman Tim Scott, R-S.C., whose panel held Warsh’s confirmation hearing, said in a statement that the new Fed chairman is a “serious and experienced leader” who “will help restore confidence in the Fed, protect its independence, and keep it focused on stable prices and maximum employment.”
Warsh’s nomination was delayed by the Justice Department’s investigation into outgoing President Jerome Powell. (Elizabeth Frantz/Reuters)
President Trump said at the ceremony: “I want Kevin to be completely independent. I want him to be independent and just do a great job. Don’t look at me, don’t look at anyone. Just do your own job and do a great job, okay?”
The president added that he believed Warsh would “safeguard the integrity of the Fed” and be a leader that other Fed policymakers would listen to and work with.
“Luckily, unlike some of his predecessors, Kevin understands that when the economy is booming, it’s a good thing. We don’t need to go crazy, just let it boom,” Trump said. “We want it to be like no one has ever experienced before, because we have some debt that we would like to take care of, and the way to do that is through growth.”
“We want to stop inflation, but we don’t want to stop greatness,” the president said. “And you know, as we’ve discussed, economic growth doesn’t mean inflation… you don’t have to stop the world because you’re doing well.”
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Kevin Warsh was sworn in before Supreme Court Justice Clarence Thomas. (Al Drago/Bloomberg via Getty Images)
After his oath of office was administered by Supreme Court Justice Clarence Thomas, Warsh said he was grateful for the opportunity to take on the role “at a time of great consequence” and that it was “the honor of his life to be recalled to public service.”
Warsh said he intends to “fill the role of chairman with energy and determination” as former Fed Chairman Alan Greenspan did, acknowledging that his predecessor recently celebrated his 100th birthday and that he saw him as someone whose example he wanted to follow.
“Our mandate at the Fed is to promote price stability and maximum employment. When we pursue these goals with wisdom and clarity, independence and determination, inflation can be lower, growth stronger, and real wages higher,” Warsh said. “America can be more prosperous and, just as importantly, its place in the world can be more secure.”
“To fulfill this mission, I will lead a Federal Reserve oriented toward reform, learning from past successes and mistakes, escaping static frameworks and models, and upholding clear standards of integrity and performance.”
Warsh and Trump shake hands during his inauguration ceremony at the White House. (Anna Moneymaker/Getty Images)
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“Today marks the return of an institution that I actually cherish. It was nearly a generation ago, in another time of great importance, that I met with prominent Fed officials, here in Washington and at the Reserve Banks,” Warsh continued.
“My goal now is to create an environment in which the best people can do the best work of their lives and meet all challenges in the spirit of common purpose and dedication to the national interest. In a word, towards excellence. These duties are now mine, Mr. President, thanks to the trust you have reposed in me, I accept them with gratitude and I will strive every day to serve our citizens well,” Warsh said.
