Trump’s New Fed Boss Officially Takes Over

Kevin Warsh, President Donald Trump’s “central casting” pick for the Federal Reserve, stepped into the spotlight on Friday, officially taking the helm as chairman of the Federal Reserve.

Warsh, who replaces Jerome Powell as chairman, was sworn in in the East Room of the White House in a ceremony hosted by President Trump. 

“I expect he’ll go down as one of the truly great chairmen of the Federal Reserve,” Trump said. “Unfortunately, in the eyes of many, the Fed lost its way in recent years. It became distracted by concerns far removed from its core mission and mandate, drifting into matters such as climate policy and DEI initiatives … Kevin has spoken about a need to return to the Fed’s core mandate.” 

Critics of Warsh, such as leftist Senator Elizabeth Warren (D-MA), argue that he will not be able to run the Fed independent of President Trump.

“This guy is not independent,” said Warren. The Massachusetts senator even went as far as calling him Trump’s “sock puppet” while she grilled him during his confirmation hearing. 

At Warsh’s ceremony, Trump said, “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.” 

Later in the speech, Trump hinted that Warsh would lower interest rates. 

“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.” During Powell’s tenure, Trump argued the economy was strong and that Powell should lower interest rates. 

Warsh replaced Powell, who was also nominated by Trump eight years ago. Warsh takes over a Federal Reserve facing competing pressures. Inflation remains elevated amid the war with Iran, while the Trump administration continues to push for lower interest rates. After April’s hotter-than-expected inflation report, expectations for a rate cut in 2026 faded.

Warsh has suggested he will run a data-dependent Fed that will focus on its core mandate of keeping inflation at 2% while maximizing employment. During his confirmation process, Warsh said he intends to shrink the Federal Reserve’s balance sheet, which still holds more than $6 trillion in Treasury bonds and mortgage-backed securities. 

Trump nominated Warsh in January, but he was not confirmed by the Senate until May in the most partisan Fed chair confirmation vote in history. Senator John Fetterman (D-PA) was the only senator to cross party lines in a 54-45 vote. Warsh’s confirmation was delayed by Senator Thom Tillis (R-NC), who blocked Warsh’s process until the Department of Justice dropped its criminal investigation into Powell. 

The Department of Justice launched a criminal investigation over Powell’s Congressional testimony on the Federal Reserve’s $2.5 billion renovations. 

In 2006, Warsh became the youngest appointed to the Fed’s Board of Governors. He emerged as a key figure during the 2008 financial crisis, helping coordinate the Federal Reserve’s response as markets spiraled. He also played a role in the government rescue of AIG and in the emergency negotiations that led JPMorgan Chase to acquire Bear Stearns. After leaving the Fed in 2011, Warsh joined the board of UPS and became a distinguished visiting fellow in economics at Stanford University’s Hoover Institution.