Kevin Warsh was sworn in as the new chair of the Federal Reserve by Supreme Court Justice Clarence Thomas in a ceremony at the White House on Friday.
The 56-year-old Warsh previously served at the Fed as a member of its Board of Governors from 2006 to 2011, and became the youngest-ever Fed governor having been nominated at the age of 35. Trump nominated Warsh to the role in January, and he was confirmed by the Senate last week on a 54-45 vote.
Warsh steps into the top role at the nation's central bank at a pivotal time, with inflation rising due to an energy price shock caused by the Iran war and markets viewing the prospect of interest rate cuts as increasingly unlikely in the near term.
He replaces former Fed Chair Jerome Powell, whose term as chairman expired earlier this month. Powell has indicated he will continue to serve as a member of the Fed Board of Governors for the foreseeable future, as his term in that capacity runs until January 2028.
Powell has said that he won't be "shadow Fed chair" and will seek to build consensus with Warsh and the other members of the Federal Open Market Committee, which sets monetary policy, when it's possible to do so.
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Warsh's nomination faced a delay in the Senate as Sen. Thom Tillis, R-N.C., held up the nomination over his concerns about the Justice Department's investigation into Powell's testimony about the Fed's costly renovation project and the implications for central bank independence – as it occurred against the backdrop of Trump urging Powell to cut interest rates and threatening to fire him.
Tillis dropped his hold after U.S. Attorney for the District of Columbia Jeanine Pirro closed her office's investigation, with the Fed's inspector general, Michael Horowitz, taking it over. That allowed his nomination to proceed from the Senate Banking Committee to the Senate floor.
Senate Banking Committee Chairman Tim Scott, R-S.C., whose panel held Warsh's confirmation hearing, said in a statement that the new Fed chair is a "serious, experienced leader" who will "help restore trust in the Fed, protect its independence, and keep it focused on stable prices and maximum employment."
President Trump said during the ceremony that "I want Kevin to be totally independent. 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 and do a great job, okay?"
The president added that he thinks Warsh will "safeguard the Fed's integrity" and will be a leader whom other Fed policymakers listen to and collaborate with.
"Thankfully, unlike some of his predecessors, Kevin understands that when the economy is booming, that's a good thing. We don't have to go crazy, just let it boom," Trump said. "We want it to be like nobody has ever had before, because we do have some debt we'd like to take care of, and the way you do that is through growth."
"We want to stop inflation, but we don't want to stop greatness," the president said. "And you know as we discussed, economic growth doesn't mean inflation… you don't have to stop the world because you're doing well."
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After his oath of office was administered by Supreme Court Justice Clarence Thomas, Warsh said he was grateful for the opportunity to step into the role "at a time of great consequence" and that it's the "honor of a lifetime to be called back into public service."
Warsh said that he intends to "fill the role of chairman with energy and purpose" as former Fed Chair Alan Greenspan did, acknowledging his predecessor recently marked his 100th birthday and that he was thinking about him as someone whose example he wishes to follow.
"Our mandate at the Fed is to promote price stability and maximum employment. When we pursue those aims with wisdom and clarity, independence and resolve, inflation can be lower, growth stronger, real take-home pay higher," Warsh said. "America can be more prosperous, and no less important, America's place in the world more secure."
"To fulfill this mission, 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."
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"Today marks a return to an institution that I do in fact cherish. It was nearly a generation ago, at another time of great consequence, that I with some outstanding public servants at the Fed, both here in Washington and at the Reserve banks," Warsh continued.
"My goal now is to create an environment in which the best people can do their life's best work, and to face every challenge in the spirit of common purpose and devotion to the national interest. In a word, to excellence. These duties are now mine, Mr. President, because of the trust you have placed in me, I accept them with gratitude and will strive every day to serve our fellow citizens well," Warsh said.
https://www.foxbusiness.com/economy/kevin-warsh-sworn-federal-reserve-chair-president-trump
