US President Donald Trump’s pick Kevin Warsh was sworn in as chairman of the Federal Reserve on Friday. The ceremony took place in the White House East Room and was attended by senior government officials, lawmakers and members of the judiciary. 

Supreme Court Justice Clarence Thomas administered the oath of office. Among those who attended the ceremony were Justice Brett Kavanaugh, House Speaker Mike Johnson, Cabinet members and several political leaders.

Warsh, 56, became the 11th chairman of the modern Federal Reserve system. He succeeded Jerome Powell, whose eight-year tenure ended after years of public clashes with Trump over monetary policy.

Before the oath, Trump sought to reassure observers about the independence of the central bank. The president said he expected Warsh to make decisions without political influence.

“I want Kevin to be totally independent,” Trump said. “Don’t look at me, don’t look at anybody. Just do your own thing and do a great job,” he added. 

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During Powell’s tenure, the president repeatedly called for lower interest rates and often criticized the central bank’s decisions.

Warsh became the first Federal Reserve chairman to take the oath at the White House since Alan Greenspan in 1987.

What did Kevin Warsh say after taking oath?

In his first remarks as chairman, Warsh said he will focus on the Federal Reserve’s dual mandate of maintaining stable prices and supporting employment. “Our mandate at the Fed is to promote price stability and maximum employment,” Warsh said.

He said that strong execution of those goals would help lower inflation, strengthen economic growth and increase household purchasing power. “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,” he said.

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Warsh also promised changes within the institution. He said he would lead a “reform-oriented Federal Reserve” that learns from both successes and mistakes. He vowed to move beyond rigid policy frameworks while maintaining high standards of integrity and performance, reported Associated Press.

The new chairman has been saying that the central bank should concentrate on its core responsibilities. In past speeches and writings, he criticized efforts that he viewed as extending beyond the Fed’s traditional role. He questioned initiatives related to climate change and social inequality, saying they risked distracting the institution from its primary mission of controlling inflation and supporting employment.

Warsh has also called for reducing the Federal Reserve’s footprint in financial markets and restoring a clearer focus on monetary policy.

Significance of Warsh’s appointment

Warsh is returning to the Federal Reserve after serving as a governor from 2006 to 2011. During that period, the US faced the global financial crisis, one of the biggest economic downturns in recent history.

As a Fed governor, Warsh was part of the team that worked with the US Treasury Department and other government agencies to support the financial system and help prevent the economy from falling into a deeper crisis. The experience gave him direct exposure to handling major economic emergencies.

Powell will remain at the Federal Reserve as a governor, making him the first former Fed chair in nearly eight decades to continue serving on the board after leaving the top post.

Warsh now faces several major challenges. Inflation has remained above the Federal Reserve’s long-term target of 2 percent for five consecutive years. At the same time, businesses, consumers and investors continue to debate when borrowing costs might decline.

Warsh has said that the central bank can reduce inflation while also creating conditions that allow lower benchmark interest rates over time. Whether he can achieve both goals will likely define the early years of his leadership.

Since leaving the Federal Reserve, Warsh has worked at Stanley Druckenmiller’s Duquesne Family Office and served as a lecturer at Stanford University and the Hoover Institution.