Trump appoints Kevin Warsh as chair of the Federal Reserve

Tokyo (ANTARA) - United States President Donald Trump appointed Kevin Warsh on Friday (22/5) as chair of the Federal Reserve System (the U.S. central bank) amid rising inflation caused by the ongoing war against Iran. Warsh’s appointment reduces the likelihood of near-term rate cuts, as Trump desires. The four-year tenure at the helm of the world’s most influential central bank is widely seen as a move by Trump to reshape U.S. monetary policy. However, with many investors now predicting higher interest rates this year due to rising costs, Warsh faces a tough task in guiding the Fed to meet a dual mandate of price stability and maximum employment. To carry out this mission, Warsh pledged to lead 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 my return to a institution I truly value,” Warsh said. The leadership transition at the central bank comes as the U.S. is still at war with Iran, launched since late February, pushing energy prices higher and complicating inflation prospects. Since beginning a second term as president in January 2025, Trump has pressed Powell to cut borrowing costs, while criticism has mounted that such steps could undermine the Fed’s independence. “We are very fortunate to have him. The Federal Reserve is a pillar of the global financial system and the most important central bank in the world. I want Kevin to be truly independent. I want him to be independent and to do the job well. Do not look at me, do not look at anyone, just do your job and do it well,” Trump said as he introduced Warsh at the event. He added that his administration aims to curb price rises but does not want to derail America’s prosperity. “That is what he (Warsh) wants to achieve. He wants to create positive economic growth,” Trump said. After graduating from Harvard Law School in 1995, Warsh joined Morgan Stanley’s mergers and acquisitions division, where he worked for seven years before becoming deputy president and executive director. Warsh later served as the White House’s special assistant to President George W. Bush for economic policy and as executive secretary of the National Economic Council. After the latest FOMC meeting, Powell said he would remain at the Fed as one of seven governors for a fixed period. Meanwhile, Warsh succeeds Stephen Miran on the board. Miran, a Trump ally who joined the board last year, was known as a main advocate for rate cuts within the committee. Source: Kyodo-OANA