President Donald Trump will swear in Kevin Warsh as the new Chair of the Federal Reserve on Friday, placing him at the helm of the central bank during a period of economic turbulence and as the President has clear demands regarding interest rate policy. The 56-year-old Warsh will become the 11th Chair of the Federal Reserve in the modern banking era, succeeding Jerome Powell, who served for eight years. Powell, who has been a frequent target of Trump's public ire for not cutting interest rates as quickly or as deeply as the President desired, will remain on the Federal Reserve Board as a governor. He is the first outgoing Chair in nearly 80 years to retain a seat on the Board. Friday's swearing-in marks Warsh's second stint at the Federal Reserve. He previously served as a governor from 2006 to 2011, a period during which the Fed collaborated with the Treasury Department to rescue the U.S. economy during the global financial crisis. Although Warsh participated in the crisis response, he later criticized the Fed for extending crisis-era policies for too long and overstepping its mandate by expanding its mission. For instance, he has argued that the Fed's previous involvement in issues like climate change and social inequality constituted mission creep and has pledged to reduce the central bank's market interventions. His selection follows an extensive search process initiated in the summer of 2025, which included as many as 11 candidates, comprising current and former Fed officials, prominent economists, and Wall Street strategists. During Powell's tenure, he faced frequent and often personal criticism from Trump. The former President demanded more aggressive rate cuts and accused Powell of suffering from "Trump Derangement Syndrome." Under the Biden administration, the Fed raised rates by 4.25 percentage points and later cut them by 0.75 percentage points. Despite Trump's repeated calls for rate reductions, market expectations are that the Federal Reserve is likely to hold rates steady in 2026, with potential hikes resuming in early 2027. A hallmark of Powell's term was inflation running above the Fed's 2% target for five consecutive years. Warsh has pledged that he can control inflation while simultaneously lowering benchmark interest rates. After leaving the Federal Reserve, Warsh worked at Stanley Druckenmiller's Duquesne Family Office and served as a lecturer at Stanford University and the Hoover Institution. He was a leading contender during Trump's first search for a Fed Chair in 2017, but reports indicate that, following persuasion from former Treasury Secretary Steven Mnuchin, Trump ultimately chose Powell instead.
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