By Lucy Bayly, CNN
(CNN) — Kevin Warsh was sworn in Friday at the White House as Chairman of the Board of Governors of the Federal Reserve System, succeeding Jerome Powell in one of the world’s most powerful economic positions.
Warsh, 56, steps into the four-year role at a time of mounting uncertainty over inflation, geopolitical conflicts and volatile financial markets, alongside rising political pressure on the central bank’s independence.
“I expect he will go down as one of the truly great chairmen of the Federal Reserve that we’ve ever had, I really believe that,” President Donald Trump said during remarks from the East Room, marking his first public appearance with Warsh since he nominated him earlier this year. “He’s got abilities that very few people have, covers a lot of territory, and he’s respected by everybody.”
Warsh has not been shy about the significant changes he envisions for the Fed, which he emphasized in brief remarks after being sworn in.
“I will lead a reform-oriented Federal Reserve, learning from past successes and mistakes, both escaping static frameworks and models and upholding clear standards of integrity and performance,” Warsh said.
Hand-picked by Trump in January when expectations pointed to stabilizing growth and cooler inflation, Warsh now takes the reins of an economy that is shifting under the weight of the US-Israeli war with Iran. The oil shock has sharply pushed up gasoline prices, mortgage rates have climbed to their highest level in nine months and overall inflation has surged to the highest level in three years.
The US consumer has remained surprisingly resilient, continuing to spend despite higher prices and insulating the economy from a downturn. But affordability concerns have left many Americans unhappy about the economy, which could lead to major political ramifications for the midterm elections. Consumer sentiment is at an all-time low: Americans feel worse now than they did during wars, 9/11, the Great Recession, the Covid-19 pandemic and the inflation surge afterward.
That leaves Warsh facing a sharper balancing act and puts him under immediate pressure to signal how the Fed will respond to the tension in the US economy: Hold rates steady and wait for clarity, or shift toward a more restrictive stance if inflation proves harder to contain.
Warsh is widely viewed as being aligned with Trump, who has aggressively demanded rate cuts and even joked that he would sue Warsh if he does not lower borrowing costs. Trump has said rates must be lower to reduce the government’s borrowing costs and to juice economic growth.
But Trump said Friday he wants Warsh “to be totally independent.”
“Don’t look at me, don’t look at anybody, just do your own thing and do a great job,” Trump added. However, he repeatedly berated Powell for not lowering rates quickly enough, calling him a “numbskull” and an “average mentally person” and even threa