Trump will swear in Kevin Warsh on May 22 to lead US Federal Reserve

[WASHINGTON] US President Donald Trump will swear in Kevin Warsh as the chair of the US Federal Reserve on Friday (May 22) at the White House, the Trump administration said on Thursday.

Warsh was confirmed to the role in a near party-line vote on May 13. He succeeds Jerome Powell as the chair of the central bank, though Powell’s separate term as a Fed governor extends to January of 2028.

Warsh, 56, will serve a four-year term as chair and a 14-year term as a Fed governor. Trump selected him as a bulwark against further rate hikes. Warsh has long expressed a desire to lower rates while slashing the Fed’s balance sheet.

He will take office as fellow governors contemplate raising rates to tame inflation brought on by Trump’s war on Iran. A majority of Fed policymakers at their Apr 28 to 29 meeting felt “some policy firming would likely become appropriate” if inflation stays persistently above the central bank’s 2 per cent target, according to minutes of the meeting released on Wednesday.

Warsh was passed over for the role in 2017 during Trump’s first term. A Fed governor from 2006 to 2011, he was the youngest member of the board at 35, when he was first appointed in the George W Bush administration.

He is likely to face intense scrutiny as the Fed chair. Trump clashed with Powell for not cutting rates, tagging him with the nickname “Too Late”, and referring to him as a “jerk”.

The Trump administration overtly suggested the Fed should be less independent from the White House and dovetail monetary policy with the White House’s fiscal agenda. Warsh during confirmation hearings embraced many of the same policies as Trump officials, but said that he would maintain autonomy from the White House.

Fed governor Stephen Miran will leave his position on the board on or shortly before Warsh is sworn into office. Miran took a leave of absence as the chair of Trump’s White House Council of Economic Advisers to fill a Fed vacancy.

He remained in that role longer than anticipated while prosecutors investigated Powell and the Fed over the cost of the renovation of the central bank’s Washington, DC headquarters. A federal judge sharply criticised the case and North Carolina Senator Thom Tillis, a Republican, stalled Warsh’s nomination in protest over the investigation.

SEE ALSO

US Fed minutes show more policymakers open to a rate hike

Trump tells Fed to consider fintech access to payment accounts

Fed’s Warsh has a difficult boss and tough job ahead, says StanChart CEO Winters

‘A Fed chair with a spine’: A look back at Jerome Powell’s tenure as US central bank chief

More

Prosecutors dropped the inquiry in April, and Tillis lifted his hold on the nomination. REUTERS