Trump swears in Kevin Warsh as Fed chair at White House, urges independence but signals rate-cut hopes

President Donald Trump on Friday presided over the White House swearing-in of new Federal Reserve Chair Kevin Warsh, expressing hope that Warsh would help stimulate the economy while also emphasizing the central bank's independence.

Trump had spent months criticizing Warsh's predecessor, Jerome Powell, for being reluctant to cut interest rates. The Republican president has argued that lower borrowing costs would provide an economic boost. By holding the ceremony in the East Room of the White House rather than at the Fed — an unusual move — Trump signaled his satisfaction with Warsh's appointment.

Economic Context

The ongoing war with Iran has caused gas prices to spike, unsettled financial markets, and driven inflation concerns across the economy. These developments have raised recent doubts about whether Warsh might heed Trump's calls and push the Fed to lower rates.

Trump's Remarks

Trump said he had faith that Warsh would prioritize a strong economy:

"Thankfully, unlike some of his predecessors, Kevin understands that when the economy is booming, it is, that's a good thing."

The president added that it was not necessary "to go crazy. Just let it go. We want it to boom."

Trump also stated: "I expect he will go down as one of the truly great chairmen of the Federal Reserve that we've ever had."

Independence and Mixed Signals

Trump made a point of saying during his remarks: "Honestly, I really mean this. This is not said in any other way: I want Kevin to be totally independent."

He added: "I want him to be independent and just do a great job. Don't look at me, don't look at anybody. Just do your own thing."

However, in the next breath, Trump noted that "in the eyes of many, the Fed has lost its way in recent years" under former President Joe Biden. He also suggested that Warsh should lead policies promoting "positive economic growth" without necessarily causing higher inflation.

Trump noted that the stock market had risen Friday, telling Warsh: "That means they like you."

Ceremony Details

Supreme Court Justice Clarence Thomas administered the oath of office. Also in attendance were:

• House Speaker Mike Johnson (R-La.)
• Justice Brett Kavanaugh
• CIA Director John Ratcliffe
• Various Cabinet members

Historical Context

Republican President Ronald Reagan swore in Alan Greenspan as Fed chair at the White House in 1987. Republican President George W. Bush attended the 2006 ceremony at central bank headquarters when Ben Bernanke became chair. Holding the event at the White House raises further questions about the Fed's independence at a time when Trump has repeatedly sought to influence the central bank.

Background on Powell and Fed Investigations

Trump's Department of Justice began an investigation into Powell and the Fed's extensive building renovations. That drew backlash from lawmakers, and the department scrapped the investigation. The Fed's internal watchdog is now handling the matter. Powell's term as chair ended last week, though he has opted to remain on the Fed board for now.

Warsh's Policy Stance

Warsh once harshly criticized the Fed's policies, including its low interest rate policies coming out of the coronavirus pandemic, which he said contributed to the largest U.S. inflation spike in four decades in 2021–2022. More recently, he has sometimes echoed Trump's demands for lower rates.

Warsh says productivity gains from artificial intelligence will help the economy grow more quickly without spurring inflation, enabling the Fed to reduce borrowing costs. Many Fed officials, however, disagree that AI's development will support rate cuts, especially because the technology has also been blamed for large-scale layoffs in the computer sector and other parts of the economy.

On Friday, Warsh promised "to lead a reform oriented Federal Reserve, learning from past successes and mistakes."