Kevin Warsh Sworn In as US Federal Reserve Chair: Policy Focus and Inflation Outlook

US President Donald Trump has formally transferred leadership of the US Federal Reserve to Kevin Warsh. The move placed Warsh at the centre of decisions on inflation and interest rates. The change came as investors watched for signals on borrowing costs. Trump also faced questions about political pressure on central bank policy.

Warsh took the oath during a White House ceremony, underlining Trump’s focus on the Fed. Trump still said the institution would act independently under Warsh. During the event, Trump told Warsh to "do your own thing". Trump said Warsh should avoid influence and deliver strong economic results.

After the ceremony, Trump hinted at faster rate cuts during a campaign-style event in New York. Trump said borrowing costs could fall "very quickly" under Warsh. Trump also praised the appointment and criticised the prior Fed leadership. The remarks kept attention on how quickly interest rates might shift.

Trump’s ties with outgoing chair Jerome Powell stayed tense for years. The main dispute was the pace of interest rate changes. Trump repeatedly argued that rates should have fallen further to support growth. Powell led the Fed through a period of sharp rate increases. The Fed later moved into gradual easing.

Many investors still expected steady policy through much of 2026. Some analysts also projected possible tightening in early 2027. These views differed from Trump’s public preference for lower rates. Warsh has argued inflation can be controlled over time. Warsh also said benchmark interest rates could still move lower.

Powell’s eight-year term featured inflation staying above the Fed’s 2% goal for years. Consumer prices remained elevated during much of that span. The Fed responded with sharp rises in benchmark rates. Later, it started easing in steps. Inflation and wage trends remained central to future decisions under Warsh.

Federal Reserve, interest rates and inflation: White House swearing-in details

The East Room event drew senior political and judicial leaders. Supreme Court Justices Clarence Thomas and Brett Kavanaugh attended. House Speaker Mike Johnson and several Cabinet officials were also present. Justice Thomas administered the oath. CNBC reported Warsh was the first Fed chair sworn in there since Alan Greenspan in 1987.

Warsh said the Federal Reserve would prioritise price stability and maximum employment. Warsh also pointed to clearer policy direction and institutional independence. Warsh said reforms would aim to strengthen economic confidence. Warsh added the Fed must learn from successes and mistakes. Warsh also warned against rigid policy frameworks.

Warsh replaced Powell after eight years as chair. At 56, Warsh became the 11th head of the modern central bank. Powell will remain a governor on the Federal Reserve Board. Such an arrangement has been rare for decades. The leadership change still left Powell involved in policy discussions.

Before returning, Warsh worked with Stanley Druckenmiller at Duquesne Family Office. Warsh also taught at Stanford University and the Hoover Institution. Warsh served as a Fed governor from 2006 to 2011. During the global financial crisis, Warsh worked with Treasury officials on market stability measures.

In recent years, Warsh criticised the Fed for keeping emergency-era support for too long. Warsh also argued against expanding the Fed’s role into climate policy. Warsh made similar points on social inequality debates. Warsh said the central bank should stay focused on inflation, employment, and financial stability.

Item	Detail
New Fed chair	Kevin Warsh, age 56
Outgoing chair	Jerome Powell, served eight years
Inflation reference	Above the Fed’s long-term 2% target for several years
Market view	Rates seen stable through much of 2026; possible tightening in early 2027

Warsh began the role with inflation risks still under scrutiny and rate expectations divided. Trump publicly backed Fed independence, while also calling for lower borrowing costs. Warsh outlined a focus on price stability, employment, and reforms. Markets now tracked how Warsh balanced credibility with pressure for faster interest rate changes.