Watch: Trump will swear in Kevin Warsh as Fed chair as he seeks interest rate cuts

• Warsh, 56, previously served as Fed governor from 2006-2011 during the financial crisis and has criticized the Fed for policy overreach and mission creep into areas like climate change
• Powell faced repeated personal criticism from Trump over his refusal to cut rates aggressively, despite lowering rates by 0.75 percentage points and raising them by 4.25 points during Biden's presidency
• Markets are betting the Fed will maintain current rates through 2026 and possibly hike in early 2027, despite Trump's pressure for cuts, while Warsh has pledged to control inflation while lowering benchmark rates

Summary: Trump Swears in Kevin Warsh as New Federal Reserve Chair

President Donald Trump will swear in Kevin Warsh as the 11th Federal Reserve chair on Friday, replacing Jerome Powell, who served eight years and will remain as a Fed governor—the first chair to do so in nearly 80 years.

Key Developments:

Warsh, 56, assumes control of the central bank amid a turbulent economic environment and presidential pressure for aggressive interest rate cuts. This marks his second Fed stint, having previously served as governor from 2006-2011 during the global financial crisis.

Background and Tensions:

Powell faced repeated personal criticism from Trump over his refusal to cut rates as quickly or deeply as the president demanded. During Powell's tenure, the Fed lowered its benchmark rate by 0.75 percentage points and raised it by 4.25 points during the Biden presidency. Inflation remained above the Fed's 2% target for five consecutive years.

Warsh's Position:

Warsh has criticized the Fed for overreach beyond its dual mandate of price stability and low unemployment, citing mission creep in areas like climate change and social inequality. He has pledged to reduce the central bank's market footprint while controlling inflation and lowering rates simultaneously.

Market Outlook:

Despite Trump's push for rate cuts, markets anticipate the Fed will hold rates steady through most or all of 2026, with potential hikes in early 2027.

Warsh emerged from a competitive selection process involving 11 candidates. Since leaving the Fed, he worked at Stanley Druckenmiller's Duquesne Family Office and lectured at Stanford University and the Hoover Institution.