Trump urges Kevin Warsh to keep Federal Reserve 'totally independent' at White House swearing-in

Donald Trump has urged Kevin Warsh to be "totally independent" as he was sworn in at the White House as the incoming Federal Reserve chairman. The ceremony took place on Friday and marked the first time the building has been used to swear in a Fed chair since Alan Greenspan in 1987. Trump said he wanted Warsh to "do your own thing" and "do a great job", while also saying the central bank had "lost its way" under Jerome Powell.

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The president's remarks came after months of public pressure on the Federal Reserve to cut interest rates. Trump has repeatedly called for lower borrowing costs to support economic growth and said backing an immediate reduction in US rates would be a requirement for anyone considered for the job. The Fed has so far resisted that pressure, holding its rate at between 3.5% and 3.75% in April and delaying expected cuts as it weighs the impact of the US-Israel war in Iran on inflation.

Warsh, a former Wall Street banker, now faces the task of leading the central bank while convincing markets, lawmakers and the public that it can remain free from White House influence. Trump said no one in America was better prepared to lead the bank, but critics have questioned whether Warsh can act independently. Senator Elizabeth Warren, a senior Democrat, had warned he would be little more than a "sock puppet" for the president.

The appointment matters because the Federal Reserve plays a central role in setting the cost of borrowing across the US economy. Higher interest rates make loans more expensive for consumers and businesses, which can help slow inflation by reducing spending. The bank's decisions also affect financial markets globally, making any perceived challenge to its independence closely watched beyond Washington.

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The swearing-in also highlights a wider dispute over the Fed's role and priorities. Trump has accused the central bank of drifting away from its core responsibilities of stable prices, low inflation and full employment. He has also criticised it for focusing on issues such as climate change and diversity, equity and inclusion, which he says are outside its mandate.

Warsh has said he wants to lead a "reform-oriented" Federal Reserve, but the details of how he would do that were not set out in the material provided. What remains unclear is how Warsh will balance Trump's public expectations with the Fed's formal independence once he takes up the role. It is also not yet clear whether the central bank will keep rates unchanged for the rest of 2026, as some economists expect, or move in a different direction.

Investors and policymakers will be watching for any sign that the new chair can steer policy without appearing to answer to the White House.

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