Kevin Warsh officially became the chairman of the United States Federal Reserve on Friday, taking the oath of office administered by Supreme Court Justice Clarence Thomas. The Federal Open Market Committee voted unanimously to select Warsh for the role.
Trump attended the ceremony and used the occasion to signal his expectations for the new chair, telling attendees that Warsh would remain “independent” of the Executive Branch on interest rate policy while touting employment figures he described as record-breaking.
The president’s remarks drew attention for their tone on economic growth and debt. “Thankfully, unlike some of his predecessors, Kevin understands that when the economy is booming, that’s a good thing,” Trump said. He went on to address the country’s debt burden: “We do have some debt we would like to take care of, and the way you do that is through growth. We are going to grow our way out of it so fast.”
Trump also staked out a position on the tension between controlling inflation and sustaining expansion. “We want to stop inflation, but we don’t want to stop greatness,” he said, a line that drew mixed reactions from investors and economists weighing the likelihood of the Federal Reserve continuing to expand the monetary supply through low interest rates.
Warsh, who later referred to Thomas as “an esteemed friend,” pledged a different direction for the institution. “Inflation can be lower, growth stronger, real take-home pay higher, and America can be more prosperous, and no less important,” he said, while also framing his tenure around a “reform-oriented Federal Reserve.”
Markets are not anticipating any relief on borrowing costs this year. Investors and traders forecast no interest rate cuts for the remainder of 2026, with some pricing in the possibility of hikes at upcoming Federal Open Market Committee (FOMC) meetings. According to CME FedWatch tool data, 3.5% of investors are forecasting a 25 basis point rate hike at the next FOMC meeting scheduled for June 17. The current Federal Funds Target rate sits between 350 and 375 basis points.
