Kevin Warsh sworn in as Fed chair

Kevin Warsh was sworn in Friday as the new chairman of the Federal Reserve, the world’s most influential central bank.

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Warsh’s official ascension to the role comes after the Senate confirmed him as head of the Fed in a 54-45 vote on May 13. The only Democrat to cross the aisle was Sen. John Fetterman of Pennsylvania.

The optics of Friday’s event, held in the White House’s famed East Room and featuring lengthy remarks from President Donald Trump, underscore how closely the president wants to control the Fed and its interest-rate-setting body.

“I want Kevin to be completely independent and do a great job,” Trump said before Warsh was sworn in before Supreme Court Justice Clarence Thomas.

Trump added that he wanted Warsh to do his “own thing.”

Warsh said he believed Americans’ standard of living could be improved and that “the Fed had something to do with it.”

“I will lead a reform-oriented Federal Reserve,” Warsh added of the institution he says he cherishes.

The last Fed chair to be sworn in at the White House was Alan Greenspan in 1987. The two most recent chairs, Janet Yellen and Jerome Powell, were both sworn in by other board members in low-key ceremonies at the bank’s headquarters.

Warsh takes the helm of the Federal Reserve at a difficult time for the central bank.

Inflation is rising, the labor market is under pressure, and a consensus is forming among economists that interest rates should not be lowered in the near future.

On Friday, Fed Governor Christopher Waller – a Trump appointee – said: “I can no longer rule out a rate hike in the future if inflation does not come down soon.”

Waller added that he thinks the Fed’s next rate-setting committee statement should “make clear that a rate cut is no more likely in the future than a rate increase.”

This consensus runs directly counter to Trump’s long-standing goal of dramatically lowering benchmark borrowing rates — by any means necessary.

Trump’s pursuit of these lower rates has resulted in dozens, if not hundreds, of public insults and criticism directed at Powell, who was the president’s choice to chair the bank nearly a decade ago.

The Fed is also awaiting a ruling from the Supreme Court on Trump’s attempt to fire Gov. Lisa Cook. Powell personally attended oral arguments in the case to show his support for the central bank’s characteristic independence.

Trump, however, remained obsessed with lowering rates.

Before choosing Warsh, Fed governor from 2006 to 2011, to lead the Fed, he made clear what model he wanted for his next leader.

In December, Trump said that person would be “someone who believes very much in lowering interest rates.”

In February, speaking to “NBC Nightly News” anchor Tom Llamas in the Oval Office, Trump said Warsh “wouldn’t have gotten the job” if he hadn’t wanted to cut rates.

Trump also said he believed the central bank was “in theory” an “independent agency” and that it should follow his suggestions on monetary policy because, in his words, he knows the economy “better than almost anyone.”

But since then, the economy has been on a roller coaster ride.

On February 28, Trump launched a war with Iran, shaking global markets as the critical Strait of Hormuz effectively shut down, cutting off more than 20 percent of global oil supplies.

In the months since, the average price of gasoline has jumped more than 50%, headline inflation has jumped to 3.8% and yields on government bonds around the world have soared as investors worry about the extent of inflation to come.

On CNBC in mid-April, Treasury Secretary Scott Bessent said he “understands” if the Fed should now wait to cut rates “for clarity.”

Since his nomination, Warsh has repeatedly pledged to act independently, including during his confirmation hearing before the Senate Banking, Housing and Urban Affairs Committee in April.

Yet few people imagined that Warsh would face as much inflationary pressure from the start as it does today.

Even Trump seems to be changing his mind slightly on Warsh and interest rates.

“I’m going to let him do what he wants,” he said when asked by the Washington Examiner if he thought Warsh would cut rates further. “He’s a very talented guy, he’ll be fine, he’ll do a good job.”

Tariffs aren’t the only controversial item on Warsh’s agenda. He also said he wants to bring “regime change” to the central bank, changing the way the Fed communicates, shrinking its balance sheet and reforming its forecasting models.

In just three weeks, Warsh will lead his first meeting of the Federal Open Market Committee as chairman, where officials will debate what to do with interest rates.