Kevin Warsh took oath as US Federal Reserve chair on Friday, at a pivotal moment for monetary policy and the American economy. During his swearing-in ceremony, he said he will pursue a “reform-oriented” agenda under his leadership.
“To fulfill this mission, I will lead a reform-oriented Federal Reserve, learning from past successes and mistakes, both escaping static frameworks and models, and upholding clear standards of integrity and performance,” he said, minutes after being sworn in.
He also called for central bankers to pursue their goals “with wisdom and clarity, independence and resolve,” adding that “inflation can be lower, growth stronger, real take-home pay higher, and America can be more prosperous” if they did so.
US President Donald Trump said he wanted the new Federal Reserve chair to be fully independent, before urging the central bank head at his swearing in to let the economy “boom.”
Trump, who nominated Warsh for the role, has put the Fed under unprecedented pressure to cut interest rates and frequently insulted Warsh’s predecessor Jerome Powell.
“I want Kevin to be totally independent. I want him to be independent and just do a great job,” Trump said at the White House. “Don’t look at me, don’t look at anybody, just do your own thing.”
But Trump then made it clear what he thought Warsh should be doing, saying that the Fed had “lost its way in recent years.”
“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,” Trump said. “We have to go crazy, just let it boom. We want it to boom.”
From the start of his term, Warsh will be looking over his shoulder as the Fed’s 11th chair – at a global bond market that has begun bidding up interest rates in a sign of growing inflation concern, at colleagues like Waller who have begun setting expectations that higher rates may be needed.
Warsh will now face face Trump, who in the past has viewed rate hikes as a political assault on his economic program and been sharply critical of outgoing Fed Chair Jerome Powell for not lowering borrowing costs.
