Trump Inaugurates Kevin Warsh as Fed Chair

TEMPO.CO, Jakarta - United States President Donald Trump inaugurated Kevin Warsh on Friday, May 22, as chair of the Federal Reserve System amid rising inflation due to the ongoing war against Iran. Warsh's inauguration makes the chances of a near-term interest rate cut, as Trump wants, even slimmer.

Warsh's appointment to a four-year term at the helm of the world's most influential central bank was widely seen as a sign of Trump's desire to change U.S. monetary policy.

However, with many investors now predicting interest rates will rise this year due to rising costs, Warsh faces a tough task in guiding the Fed to fulfill its dual mandate of maintaining price stability and maximizing employment.

"When we pursue those aims with wisdom and clarity, independence and resolve, inflation can be lower, growth stronger, real take home pay higher, and America can be more prosperous, and no less important, America’s place in the world more secure," Warsh said at the White House inauguration ceremony, as quoted by ANTARA.

To carry out this mission, Warsh is committed to leading a reform-oriented Central Bank, learning from past successes and mistakes, moving beyond static frameworks and models, and upholding clear standards of integrity and performance.

"Today marks a return to an institution that I do, in fact, cherish," Warsh said.

The change in central bank leadership comes as the U.S. continues its war against Iran, which began in late February and has driven up energy prices and complicated the inflation outlook.

Trump repeatedly criticized Jerome Powell for not lowering borrowing costs, so Warsh replaced him. Since beginning his second term as president in January 2025, Trump has continued to pressure Powell to cut borrowing costs, while critics have warned that such a move could undermine the Fed's independence.

"We're very fortunate to have him. The Federal Reserve is a pillar of the world financial system and the most important central bank. I want Kevin to be totally independent, I want them 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 when introducing Warsh at the event.

Trump said his administration aims to control rising prices without hindering the country’s growth. He added that Warsh also supports efforts to drive positive economic growth in the U.S. 

Warsh joined the Fed in 2006 at age 35, making him the youngest person ever to serve at the central bank. He served on the Fed's board until 2011.

After graduating from Harvard Law School in 1995, Warsh joined Morgan Stanley's mergers and acquisitions division, where he worked for seven years and later became a vice president and executive director.

Warsh later served as special assistant to President George W. Bush for economic policy and executive secretary of the National Economic Council in the White House.

The first meeting of the Federal Open Market Committee (FOMC), which Warsh will chair, is scheduled for June 16-17.

Following the final FOMC meeting, Powell announced he would remain on the Fed as one of its seven governors for a limited period. Meanwhile, Warsh replaced Stephen Miran on the board. Miran, a Trump ally who joined the board last year, is known as a leading proponent of interest rate cuts within the committee.

Read: Trump's Federal Reserve Chair Nominee Confirmed by Senate

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