Kevin Warsh sworn in as Fed chair as Trump urges him to "do your own thing"

Kevin Warsh was sworn in as the 17th chair of the Federal Reserve on Friday morning in a ceremony held in the East Room of the White House, taking the oath of office from Supreme Court Justice Clarence Thomas in front of senior administration officials, Republican congressional leaders and his own family. Warsh’s confirmation by the Senate earlier in May, on a vote of 54 to 45, ended a public confrontation between the executive branch and his predecessor Jerome Powell that had run for the better part of a year.

President Donald Trump used the ceremony to praise Warsh and renew his criticism of Powell. "I want Kevin to be totally independent," Trump said, before pivoting to remark, at a Suffern, New York rally hours later, that "I had a rotten head of the Fed, and now I have a great head of the Fed." He told his new appointee to "do your own thing, but don’t lose your way like Jerome Powell did."

The location matters. Warsh is the first Fed chair to be sworn in at the White House since Alan Greenspan in 1987; the more typical practice has been a ceremony at the Eccles Building, or a small private oath taking. Senior Fed staff said the move had been discussed internally for several days and was characterised as a "courtesy" rather than a substantive shift.

Powell, whose term as chair has ended but whose term on the Board of Governors runs through January 2028, is expected to remain in his Board seat. People close to him said he intends to stay through that term but has not made a public decision; his departure as chair removes the most immediate flashpoint between the central bank and the Trump administration.

Markets reacted in muted fashion. The 2-year Treasury yield held steady at 3.86 per cent and the dollar index closed the day fractionally lower; fed funds futures continued to price in around 90 basis points of cuts through the end of the year, broadly unchanged. Warsh has spent the past decade outside the Fed at the Hoover Institution and has consistently argued for a more cautious balance-sheet approach than Powell adopted in 2020-21, but has been careful to avoid forward-guidance comments since his nomination.

The new chair’s first FOMC meeting will be the June 16-17 gathering, at which the committee will publish updated economic projections and a new dot plot. Warsh will deliver his first formal post-meeting press conference at that meeting.