Kevin Warsh sworn in as Chairman of US Federal Reserve; Trump says he "will restore confidence in the Fed"
Washington DC, May 22
Kevin Warsh was sworn in as the Chairman of the US Federal Reserve Board of Governors on Friday during a ceremony at the White House, with President Donald Trump expressing confidence in his leadership and calling him one of the best-qualified individuals to lead the US central bank.
Speaking during the swearing-in ceremony, Trump said, "Today, I'm thrilled to welcome you to the White House for the swearing-in of our new Chairman of the Federal Reserve Board of Governors, Kevin Warsh."
Praising Warsh's experience and leadership, Trump added, "I expect he will go down as one of the truly great chairmen of the Federal Reserve that we've ever had. No one in America is better prepared to lead the Federal Reserve than Kevin Warsh."
The US President also stressed that the new Federal Reserve chairman should function independently, while noting that the Federal Reserve has "lost its way in recent years" and expressed hope that Warsh's appointment would help restore public trust in the institution.
"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," Trump said.
"Kevin will restore confidence in the Fed and among Americans all across the political spectrum," he added.
The swearing-in ceremony assumes importance as Trump has personally taken a keen interest in the appointment of Warsh after disagreements with the former Chairman Jerome Powell over interest rate cuts.
On May 14, the White House announced that Kevin Warsh had been confirmed as the 17th Chairman of the Board of Governors of the Federal Reserve System.
Outgoing Fed chair Powell, who was also picked by Trump in his first term, was sworn in at the Federal Reserve, which the US President had skipped.
Before picking Powell, Warsh had been interviewed for the position of Fed chair in 2017 by Trump.
Powell was reappointed in 2021 for a second term by the Biden administration. Alan Greenspan was the last Federal Reserve chair who was sworn in at the White House in 1987.
Warsh was confirmed as Federal Reserve chair last week by the Senate for a period of four years. The Federal Reserve had said that Powell would continue as acting chief until Warsh is sworn in.
The transition is likely to be smooth after Warsh's confirmation by the Senate and his consent to divest some of his personal investments in order to meet ethics requirements.
Warsh is taking over at a critical moment in the US economy as prices soar and consumer sentiment takes a hit amid an uncertain Iran war.
Oil prices have shot up even as the volatility continues to rattle investors with no signs of resolution emerging in West Asia.
Warsh was the youngest governor to join the Federal Reserve in 2006 after stints in the Bush administration and at Morgan Stanley.
He brought his Wall Street skillset to the Federal Reserve, which was dominated by economists.
He was concerned about the Federal Reserve's extensive bond-buying programme during the 2008-09 global financial crisis as a means to support the economy. He feared it would be unwieldy and eventually become a tool in the hands of the government.
Warsh has vowed to trim the Fed's bloated balance sheet, which runs over USD 6 trillion, along with a slew of other changes that have sent mixed signals to Wall Street.
— ANI
Reader Comments
This is interesting. Warsh was critical of bond-buying programs during the 2008 crisis, and now he wants to trim the balance sheet. With oil prices soaring due to Iran tensions, this could be a rocky road. India should watch closely – our economy is already feeling the heat from global uncertainty.
Honestly, Trump saying "don't look at me, do your own thing" is peak irony. He fired Powell over rate cuts, and now he's installed someone who shares his views? 😂 But Warsh does have good credentials from Bush era. Let's see if he can handle the Iran war impact. India's forex reserves might get affected too nah?
Warsh seems capable, but the real test is: will he really be independent? Trump's track record isn't great. And the Fed's balance sheet at $6 trillion is indeed massive. If he cuts it too fast, could crash markets. India's IT sector and rupee might see spillovers. Keeping fingers crossed 🤞
Is it just me or does the US Fed drama remind me of our own RBI governor appointments? 😄 Anyway, Warsh has a tough job ahead with Iran war and inflation. India needs to strengthen its own monetary policy independence. Apne ghar pe dhyan do pehle!
Respectful criticism: Trump says "restore confidence" but the way he handled Powell was chaotic. Warsh may be qualified, but the process feels political. For India, we should take note: central bank independence is crucial. Hope Warsh proves us wrong and does a good job for global economic stability.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.