In a White House ceremony Friday, Kevin Warsh was sworn in as the 17th chair of the Federal Reserve by Supreme Court Justice Clarence Thomas.
President Donald Trump had nominated Warsh, a former Fed governor, financier and attorney, to succeed former Federal Reserve Chair Jerome Powell in January.
Powell’s second, four-year term leading the central bank expired last week, and he was named chair pro tempore until Warsh was sworn in.
Powell has said he plans to remain on as a Fed governor until a Justice Department investigation into the central bank’s Washington headquarters renovation is “well and truly” over. His 14-year term as governor expires in 2028.
In January, Powell had announced the probe in a rare, recorded video statement, contending that at issue was “whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation.”
Trump has repeatedly criticized Powell over not lowering interest rates, but denied knowing about the probe immediately after it was announced.
During Friday’s event, the president told the crowd that he wanted Warsh to be “totally independent.”
“Don’t look at me, don’t look at anybody, just do your own thing and do a great job,” the president said.
Trump later added: “Unlike some of his predecessors, Kevin understands that when the economy is booming … that’s a good thing. We don’t have to go crazy, just let it boom. We want it to boom. We want it to be like nobody has ever had before, because we do have some debt we’d like to take care of.”
Warsh takes the helm of the central bank as inflation has remained above the Fed’s 2% target for more than five years and has climbed in recent months as the Iran war pushed energy prices higher.
The Fed has a dual mandate – stable prices and maximum employment – and employs adjustments to the key benchmark federal funds rate as a main monetary policymaking tool. Higher interest rates traditionally cool inflation, while lower rates generally help spur the job market.
The seven members of the central bank’s Board of Governors – along with five Reserve Bank presidents – each vote on adjustments during Federal Open Market Committee meetings. The next one is scheduled for June 16-17.
During his confirmation hearing last month, several senators pressed Warsh about whether Trump had asked him to lower rates once confirmed.
“The president never asked me to predetermine, commit, fix, decide on any interest rate decision in any of our discussions, nor would I ever agree to do so,” Warsh told lawmakers.
The new Fed chair also described “regime change” during his testimony that he would like to implement at the central bank, including reducing the Fed’s balance sheet which is currently about $6.7 trillion.
On Friday, Warsh said he planned to 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, today marks a return to an institution that I do in fact cherish,” he told the crowd.
In addition to Thomas and a number of Cabinet members, Trump said Supreme Court Justices Samuel Alito and Brett Kavanaugh, former Vice President Dan Quayle, former Secretary of State Condoleezza Rice and former House Speaker Kevin McCarthy were also in attendance at the East Room ceremony.
