By WILL WEISSERT and MICHELLE L. PRICE Associated Press
WASHINGTON (AP) — President Donald Trump on Friday oversaw the White House swearing-in of the new Federal Reserve chair and said he would like Kevin Warsh’s help in stimulating the economy even as he tried to emphasize that the nation’s central bank would remain independent.
Trump spent months criticizing Warsh’s predecessor, Jerome Powell, for being reluctant to cut interests rates, with the Republican president arguing that lower borrowing costs would provide an economic boost. By taking the unusual step of holding the ceremony in the East Room and not the Fed, Trump made clear his pleasure that Warsh is now in charge.
The war with Iran has caused gas prices to spike, unsettled financial markets and driven inflation concerns across the economy. Those developments have led to recent doubts about whether Warsh might heed Trump’s calls and push the Fed to lower rates.
Still, Trump said he had faith that Warsh would prioritize a strong economy.
“Thankfully, unlike some of his predecessors, Kevin understands that when the economy is booming, it is, that’s a good thing,” the president said. Trump said it was not necessary “to go crazy. Just let it go. We want it to boom.”
Supreme Court Justice Clarence Thomas administered the oath of office. Also on hand were House Speaker Mike Johnson, R-La., Justice Brett Kavanaugh, CIA Director John Ratcliffe and Cabinet members.
“I expect he will go down as one of the truly great chairmen of the Federal Reserve that we’ve ever had,” Trump said of Warsh.
Republican President Ronald Reagan swore in Alan Greenspan as Fed chair at the White House in 1987. Republican President George W. Bush attended the 2006 ceremony at central bank headquarters when Ben Bernanke became chair.
But having the event at the White House raises more questions about the Fed’s independence at a time when Trump has constantly sought to bend the independent central bank to his will.
Trump’s Department of Justice began an investigation into Powell and the Fed’s extensive building renovations. That drew backlash from lawmakers and the department scrapped the investigation. The Fed’s internal watchdog is now handling the matter. Powell’s term as chair ended last week, though he has opted to remain on the Fed board for now.
Trump made a point of saying during his remarks, “Honestly, I really mean this. This is not said in any other way: I want Kevin to be totally independent.”
“I want him to be independent and just do a great job,” Trump said. “Don’t look at me, don’t look at anybody. Just do your own thing.”
In the next breath, however, Trump said that “in the eyes of many, the Fed has lost its way in recent years” under his predecessor, Democratic President Joe Biden. Trump also suggested that Warsh is looking to lead policies that promote “positive economic growth” and that doing so did not have to mean higher inflation.
Trump also noted that the stock market had risen Friday. “That means they like you,” he said of Warsh.
Warsh once harshly criticized Fed’s policies, including its low interest rate policies coming out of the coronavirus pandemic, which he says contributed to the largest U.S. inflation spike in four decades in 2021-2022. More recently, he has sometimes echoed Trump’s demands for lower rates.
Warsh says productivity gains from artificial intelligence will help the economy grow more quickly without spurring inflation, enabling the Fed to reduce borrowing costs. Many Fed officials, however, disagree that AI’s development will support rate cuts, especially because the technology has also been blamed for large-scale layoffs in the computer sector and other parts of the economy.
On Friday, Warsh promised “to lead a reform oriented Federal Reserve, learning from past successes and mistakes, both escaping static frameworks and models and upholding clear standards of integrity and performance.”
He told Trump that he believes “these years can bring unmatched prosperity that will raise living standards for Americans from all walks of life. And the Fed has something to do with it.”
Warsh further noted that the Fed’s mandate “is to promote price stability and maximum 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 more prosperous.”
As he left the ceremony, Treasury Secretary Scott Bessent reinforced Trump’s message, predicting to reporters that Warsh will “do the right thing for inflation and growth.”