Donald Trump Swears In Kevin Warsh as Federal Reserve Chair

President Donald Trump is scheduled to swear in Kevin Warsh as the chair of the Federal Reserve this Friday at the White House. Warsh, who was confirmed by the Senate on May 13 following a nomination that was briefly stalled by Senator Thom Tillis, officially assumed leadership on May 15, succeeding Jerome Powell. Powell remains a Fed governor until January 2028.

Warsh enters the role with a reform agenda he describes as "regime change," which includes reducing banking regulations, lowering capital requirements to stimulate credit, and removing forward guidance from official communications. He also intends to shrink the Fed's balance sheet by opposing the holding of mortgage loans and short-term Treasury securities. While this quantitative tightening may reduce financial system liquidity, Warsh aims to lower overall borrowing costs, attributing high inflation to policy errors made in 2021 and 2022.

Warsh assumes leadership during a period of renewed inflation pressures caused by a war with Iran and the closure of the Strait of Hormuz. Minutes from the Federal Reserve's April meeting show a internal divide, with many officials suggesting interest rate hikes may be necessary to keep inflation near 2 percent. Although Trump previously demanded rate cuts, he recently stated he would allow Warsh to operate independently. During his confirmation, Warsh vowed to be an independent actor rather than a puppet for the president. He will lead the Federal Open Market Committee's next policy meeting on June 16-17.