Kevin Warsh sworn in as Federal Reserve chair by President Trump

• Warsh was confirmed by the Senate 54-45 after a delay caused by a Justice Department investigation into Powell's testimony about the Fed's renovation project
• President Trump emphasized wanting Warsh to remain 'totally independent' while noting that 'economic growth doesn't mean inflation' and urging focus on letting the economy boom
• Powell will continue serving as a Fed Board of Governors member until January 2028 and has indicated he will not be a 'silent dissenter' but will seek to build consensus with Warsh

Market Summary: Kevin Warsh Sworn in as Federal Reserve Chair

Key Development:

Kevin Warsh, 56, was sworn in as the 17th Federal Reserve Chair on Friday by President Trump, succeeding Jerome Powell whose chairmanship term expired earlier this month. Warsh was confirmed by the Senate in a 54-45 vote last week.

Background:

Warsh previously served on the Fed's Board of Governors from 2006-2011, becoming the youngest-ever Fed governor at age 35. Powell will remain on the Board of Governors through his term ending January 2028.

Market Context:

Warsh assumes leadership during a critical period marked by:

• Rising inflation driven by an energy price shock from the Iran war
• Diminishing prospects for near-term interest rate cuts
• Questions surrounding Fed independence

Key Statements:

President Trump emphasized wanting Warsh to operate independently while allowing economic growth without constraining it through inflation concerns, stating "economic growth doesn't mean inflation." Trump stressed the importance of managing national debt through growth rather than restrictive policies.

Warsh pledged to lead a "reform-oriented Federal Reserve" focused on the dual mandate of price stability and maximum employment, promising to learn from past mistakes and uphold "clear standards of integrity and performance."

Political Note:

Warsh's confirmation faced delays due to Sen. Thom Tillis's concerns over DOJ investigations into Powell's testimony regarding the Fed's renovation project. The nomination proceeded after the investigation was transferred to the Fed's inspector general.

Senate Banking Committee Chairman Tim Scott called Warsh a "serious, experienced leader" who will "help restore trust in the Fed" and protect its independence.