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Kevin Warsh He was sworn in as the new chairman of the Federal Reserve by President Donald Trump in a ceremony at the White House on Friday.
Warsh, 56, served at the Fed as a member of the Board of Governors from 2006 to 2011, and became the youngest governor ever appointed at age 35.
Warsh stepped into the top role at the country's central bank at a crucial time, with inflation rising due to energy price shocks caused by the Iran war and markets viewing the prospect of an interest rate cut as a possibility 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 Powellhis term as chairman ended earlier this month. Powell indicated that he will continue to serve as a member of the Fed Board of Governors for the foreseeable future, as his term in that position runs until January 2028.
Powell said he would not be a “shadow Fed chairman” and would seek to build consensus with Warsh and other members of the Federal Open Market Committee, setting monetary policy, if possible.
Kevin Warsh succeeds Jerome Powell as head of the Federal Reserve. (Kevin Lamarque/Reuters)
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Warsh's nomination faced Senate delays as Sen. Thom Tillis, RN.C., who proposed the nomination due to his concerns about the investigation of the Department of Justice about the testimony of Powell about the expensive stimulus project of the Fed and the implications of the independence of the central bank – as it happened against the background of Trump urging Powell to reduce interest rates.
Tillis resigned after U.S. Attorney for the District of Columbia Jeanine Pirro closed her office's investigation, and the Fed's inspector general, Michael Horowitz, took it over. That allowed his nomination to proceed from the Senate Banking Committee to the Senate floor.
Senate Banking Committee Chairman Tim Scott, RS.C., whose panel held Warsh's confirmation hearing, said in a statement that the new Fed chairman is a “deep, experienced leader” who will help “restore the Fed's trust, protect its independence, and keep it focused on stable rates and high employment.”
Warsh's appointment was delayed by a Justice Department investigation into outgoing Chairman Jerome Powell. (Elizabeth Frantz/Reuters)
President Trump said during the event “I want Kevin to be completely independent. I want him to be independent and just do a good job. Don't look at me, don't look at anybody. Just do your thing and do a great job, okay?”
The president added that he thinks Warsh will “defend the integrity of the Fed” and be a leader that other Fed policymakers listen to and work with.
“Thankfully, unlike others before him, Kevin understands that when the economy is booming, that is a good thing. We must not go crazy, let us grow,” said Trump. “We want it to be like no one has ever had before, because we have a debt that we would like to take care of, and the way you do that is to grow.”
“We want to stop inflation, but we don't want to stop inflation,” the president said. “And you know as we have discussed, economic growth does not mean inflation… you don't have to stop the world because you are doing well.”
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Kevin Warsh took the oath of office for Superior Court Judge Clarence Thomas. (Al Drago/Bloomberg via Getty Images)
After his oath of office was administered by Superior Court Judge Clarence Thomas, Warsh said he was grateful for the opportunity to step into the role “at a time of great consequence” and that it was “the privilege of a lifetime to be called to public service.”
Warsh said he intends to “fill the role of chairman with energy and purpose” as former Fed Chairman Alan Greenspan did, acknowledging that his predecessor recently marked his 100th birthday and that he thought of him as someone whose example he wished to follow.
“Our mandate at the Fed is to promote price stability and high employment. If we pursue those goals with wisdom and clarity, independence and determination, inflation can be lower, growth stronger, real take-home pay higher,” said Warsh. “America can be more prosperous, and less important, America's place in the world is more secure.”
“To accomplish this task, I will lead a Federal Reserve focused on reform, learn from past successes and mistakes both, eschew static frameworks and models, and uphold clear standards of integrity and performance.”
Warsh and Trump shook hands during his inauguration ceremony at the White House. (Anna Moneymaker/Getty Images)
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“Today marks a return to the center that I actually appreciate. It was probably a generation ago, at one time of great consequence, that I and other prominent public servants at the Fed, both here in Washington and at the Reserve banks,” Warsh continued.
“My goal now is to create an environment where the best people can do their best life work, and face all the challenges with a spirit of common purpose and dedication to the interests of the country. In short, to do well. These jobs are now mine, Mr. President, because of the trust you have placed in me, I accept you with gratitude and I will try every day to serve our citizens well,” said Warsh.
