Kevin Warsh Takes Over US Federal Reserve; Becomes First Fed Chair Sworn In at White House Since 1987

US President Donald Trump has formally handed over leadership of the US Federal Reserve to Kevin Warsh, placing him at the centre of American monetary policy during a period marked by inflation concerns, political pressure and uncertainty over future interest rates.

Kevin Warsh Takes Charge of US Federal Reserve as Trump Signals Interest Rate Shift

The swearing-in ceremony took place at the White House, highlighting Trump's close attention to the Federal Reserve despite repeated assurances that the central bank would function independently under Warsh's leadership.

Trump Pushes for Lower Interest Rates While Backing Fed Independence

During the event, Trump publicly urged Warsh to act independently and avoid political influence. Addressing the new Fed chair, Trump said he wanted him to "do your own thing" and focus on delivering strong economic outcomes without pressure from the administration.

However, Trump later signalled his expectations around interest rates while speaking at a campaign-style gathering in New York. He suggested borrowing costs could come down "very quickly" under the new leadership and praised Warsh's appointment while criticising the previous Federal Reserve administration.

Trump's relationship with outgoing Fed chair Jerome Powell had remained strained for years, largely due to disagreements over interest rate decisions. Throughout Powell's tenure, Trump frequently argued that rates should have been reduced more aggressively to support economic growth.

Kevin Warsh Becomes First Fed Chair Sworn In at White House Since 1987

The ceremony in the East Room of the White House was attended by senior political and judicial figures, including Supreme Court Justices Clarence Thomas and Brett Kavanaugh, along with House Speaker Mike Johnson and several Cabinet officials.

Justice Thomas administered the oath, making Warsh the first Federal Reserve chair to be sworn in at the White House since former Fed chief Alan Greenspan in 1987 as per CNBC report.

In his remarks, Warsh reiterated the Federal Reserve's core objectives of maintaining price stability and supporting maximum employment. He said the institution would focus on clearer policy direction, institutional independence and reforms aimed at strengthening economic confidence.

Warsh Signals Reform-Focused Federal Reserve Approach

Warsh also indicated that he intends to bring structural changes to the central bank's functioning. He said the Federal Reserve must learn from both past successes and mistakes while moving away from rigid policy frameworks.

The new Fed chair added that inflation control, stronger economic growth and rising real wages could be achieved together through disciplined policymaking and institutional credibility.

Warsh takes charge after Powell completed eight years as head of the Federal Reserve. At 56, Warsh becomes the 11th leader of the modern US central bank. Powell, meanwhile, will continue to serve as a governor on the Federal Reserve Board, a rare arrangement not seen in decades.

Inflation, Interest Rates and Market Expectations Remain in Focus

Powell's tenure was dominated by elevated inflation, with consumer prices remaining above the Federal Reserve's long-term 2% target for several years. During that period, the Fed increased benchmark interest rates sharply before later beginning a gradual easing cycle.

Despite Trump's public support for lower rates, financial markets currently expect the Federal Reserve to keep rates relatively stable through much of 2026, with some analysts forecasting possible tightening again in early 2027.

Warsh has argued that inflation can still be controlled while allowing benchmark interest rates to move lower over time.

Kevin Warsh's Previous Fed Experience and Financial Background

Before returning to the Federal Reserve, Warsh worked with billionaire investor Stanley Druckenmiller at Duquesne Family Office and also taught at Stanford University and the Hoover Institution.

Warsh previously served as a Federal Reserve governor between 2006 and 2011, including during the global financial crisis, when he worked closely with Treasury officials to stabilise financial markets.

In recent years, he has criticised the Federal Reserve for maintaining emergency-era economic support measures for too long. He has also argued that the central bank should avoid expanding its role into areas such as climate policy and social inequality, maintaining that the Fed should remain focused primarily on inflation, employment and financial stability.