Kevin Warsh, the new chair of the Federal Reserve (Fed), officially took office. While emphasizing the Fed's independence, Warsh also put forward his intent to reform the organization.
Warsh took the oath of office at the White House on the 22nd (local time) in a ceremony presided over by U.S. President Donald Trump.
After the ceremony, Warsh said, "The Fed's mission is to promote price stability and maximum employment," adding, "When we pursue these goals with wisdom, clarity, independence, and resolve, inflation will be lower and growth will be stronger."
He continued, "The United States can become more prosperous, and its international standing will be more firmly established," adding, "To fulfill this mission, I will lead a reform-oriented Fed."
Warsh also said, "We will learn from past successes and mistakes, move beyond rigid frameworks and models, and maintain clear standards for integrity and performance."
This is interpreted as a message that, along with protecting the Fed's independence, he will to some extent respond to President Trump's calls for Fed reform. It is seen as meaning that while he will not be unilaterally dragged by Trump's pressure to cut rates, he will seek changes to the Fed's existing operating approach.
At the ceremony, Trump said, "I want Chair Warsh to be completely independent," adding, "He will restore confidence in the Fed."
That is a different stance from when he publicly pressured former Chair Jerome Powell to cut rates and did not hesitate to use insulting language. With Warsh beginning his term, it is also read as a signal that he will watch to see to what extent Warsh meets his expectations.
Trump said the administration fully supports Warsh. He also said the stock market is rallying as investors favor Warsh.
Warsh's term is four years. He will chair his first meeting of the Federal Open Market Committee (FOMC) on the 16th–17th of next month. The FOMC is the body that decides the U.S. benchmark interest rate. Markets are watching to see what changes Warsh's inauguration will bring to the Fed's future currency policy direction.
Warsh also emphasized the Fed's independence during his Senate confirmation hearing. He had said the Fed would decide currency policy based on its own judgment, not at the president's request.
Powell, the former chair who clashed with Trump throughout his term, remains a Fed governor. Trump had publicly demanded rate cuts from Powell.