Donald Trump Urges New Federal Reserve Chair Kevin Warsh to Maintain Independence
Donald Trump on Friday urged incoming Federal Reserve Chairman Kevin Warsh to be “totally independent” during a White House swearing-in ceremony. The US president, who frequently criticised Warsh’s predecessor Jerome Powell, stated his expectation that Warsh would disregard external opinions.
“I really mean this, I want Kevin to be totally independent. Don’t look at me, don’t look at anybody, just do your own thing and do a great job, okay,” Trump said.
This White House ceremony, the first for a Fed chair since Alan Greenspan in 1987, underscores the administration’s focus on Warsh’s appointment. Previously, Trump had insisted that support for immediate reductions in US borrowing costs was a prerequisite for potential candidates.
The central bank, however, has maintained its defiance of such demands, holding its rate between 3.5% and 3.75% in April. Economists now project these rates will persist through 2026, with some anticipating potential increases. Higher interest rates typically dampen inflation by making borrowing more expensive for consumers, thereby slowing spending.
Trump also used the occasion to defend his choice, asserting that “no one in America is better prepared” to lead the institution. He called for Warsh to enable the economy to “boom” and criticised Powell’s leadership, claiming the central bank had “lost its way” by focusing on issues beyond its core mandates of stable prices, low inflation, and full employment, citing diversions into climate change and diversity, equity, and inclusion (DEI).
Warsh, a former Wall Street banker, is tasked with steering the Federal Reserve through a fragmented economic landscape while reassuring politicians and the public of its autonomy from White House influence. He pledged on Friday to lead a “reform-oriented” Federal Reserve, expressing confidence that his tenure would usher in “unmatched prosperity that will raise living standards for Americans from all walks of life.”
