Kevin Warsh was sworn in as the 17th Chair of the Federal Reserve at the White House on Friday, in a ceremony administered by Justice Clarence Thomas.
Warsh said it was “the honour of a lifetime” to return to public service, adding that the coming years could deliver “unmatched prosperity” if supported by the right policy framework.
Outlining his priorities, Warsh emphasised a strong commitment to inflation control, stating that with “independence and resolve,” inflation can be brought lower over time. He also pledged to lead what he described as a “reform-oriented Fed,” signalling an agenda focused on institutional and policy changes within the central bank.
US President Donald Trump who was present during the ceremnony said he wants Kevin Warsh to independently lead the Federal Reserve, seeking to ease market concerns that he may exert pressure on monetary policy decisions.
Trump emphasised that Warsh should have full autonomy in steering the central bank, in a move aimed at reassuring investors about the Fed's policy independence and continuity.
“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 during the swearing-in ceremony.
Trump pointed to record highs on Wall Street, claiming markets were signalling approval of Warsh's leadership credentials. “Stock market's up 600 points. That means they like you,” Trump said, adding, “I think with you, it's only going to go up.”
Trump said Warsh would have the full support of his administration while operating with total independence at the Federal Reserve. He added that Warsh would move to curtail the Fed's practice of forward guidance and bring reform and modernisation to the institution.
ALSO READ: Fed Keeps Door Open: Rate Hike As Likely As Rate Cut, Says Governor Waller
Kevi Warsh takes oath just as Christopher Waller said the Federal Reserve should clearly signal that its next interest-rate move could be either a hike or a cut, as the ongoing energy shock stemming from the Iran conflict pushes inflation higher.
Waller said his current stance is to remain patient and keep rates unchanged until the economic impact of the war becomes clearer. However, he cautioned that he would not rule out future rate increases if inflation fails to ease in the coming months.
Speaking at a conference in Frankfurt in a speech titled “Policy Risks Have Changed,” Waller said, “Inflation is not headed in the right direction.” He added that recent data would justify removing the Fed's “easing bias” from its policy statement to make it clear that a rate cut is no more likely than a rate hike going forward.
While noting that the oil-driven inflation shock could prove temporary, Waller warned that he can no longer dismiss the possibility of tighter monetary policy. “I can no longer rule out rate hikes further down the road if inflation does not abate soon,” he said.
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