Ceremony of Oath Taking of the New President of the Federal Reserve Kevin Warsh
Kevin Warsh was sworn in as the President of the American Federal Reserve (Fed) on Friday, succeeding Jerome Powell after a transition marked by intense pressures from the White House.
During the ceremony, Kevin Warsh stated that he would lead a Fed focused on reforms, while not shying away from challenges.
“I will take into account the mistakes and successes of the past,” said Kevin Warsh, while thanking President Donald Trump.
The American Senate confirmed on May 13 the nomination of Kevin Warsh, the candidate proposed by Donald Trump, as the head of the United States central bank for a four-year term.
At 56 years old, Kevin Warsh, who was a member of the Fed board of governors from 2006 to 2011, will preside over his first monetary policy meeting on June 16-17, where policymakers will decide on interest rates and present new economic projections.
During his Senate hearing on April 21, the White House-appointed candidate called for a “change of course” within the central bank, including a new “framework” for inflation control and a potential revamp of the institution’s communication on monetary policy.
Kevin Warsh presented ambitious reform objectives for a central bank that, in his view, veered off course when he resigned from his position as governor in 2011 in opposition to the Fed’s bond purchases.
The Shadow of Donald Trump
His early months in office could be marked by a pressing dilemma: should interest rates be raised to prevent inflation from exceeding the Fed’s 2% target, or risk undermining his credibility as an inflation fighter?
Kevin Warsh’s comments and approach to ongoing disputes within the Fed, notably the Supreme Court’s imminent decision on Donald Trump’s unsuccessful attempt to dismiss Governor Lisa Cook, will be closely watched and compared to Jerome Powell’s unwavering defense of the Fed’s independence.
Kevin Warsh will also have to navigate Donald Trump, who has viewed rate hikes as a political attack on his economic agenda and bluntly criticized outgoing Fed Chair Jerome Powell for not lowering borrowing costs further.
Donald Trump clashed with Jerome Powell a few months after appointing him as chair – over Kevin Warsh – in 2018. He accused Powell of delaying rate cuts even as tariffs and energy costs pushed inflation above the Fed’s target that year.
One of Kevin Warsh’s first important decisions will be whether to submit an interest rate “plot” at the end of the year and reveal to what extent his views differ from his colleagues’.
If he takes a marginal stance within the Federal Open Market Committee (FOMC), his viewpoints could further confuse markets already contributing to long-term US interest rate hikes.
(Written by Howard Schneider, with contributions from Dan Burns; French version by Camille Raynaud and Coralie Lamarque, edited by Blandine Hénault and Sophie Louet)
