By Kevin Warsh delivered his first public speech as chair of the Federal Reserve on Friday, outlining a reform-focused vision for the central bank while emphasizing that inflation can be lowered without sacrificing economic growth.
Speaking after being sworn in at the White House, Warsh described the current environment as “a time of great consequence” and pledged to lead a “reform-oriented Federal Reserve” informed by lessons from past policy decisions.
The speech marked the beginning of Warsh’s tenure as the 11th Fed chair of the modern banking era, succeeding Jerome Powell after eight years in the role.
Warsh said the Fed would seek to pursue price stability and maximum employment while improving its policy framework and maintaining institutional independence.
“Our mandate at the Fed is to promote price stability and maximum employment,” Warsh said after taking the oath of office.
“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 be more prosperous, and no less important, America’s place in the world more secure,” he said.
Warsh outlines reform-oriented Fed agenda
Warsh repeatedly emphasized reform and institutional learning during his remarks, signaling that his leadership approach would focus on reassessing past policy decisions and refining the Fed’s role in financial markets and the broader economy.
“To fulfill this mission, I will 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 said.
Warsh also stated that the economy could continue growing strongly while inflation moves lower, underscoring his belief that economic expansion and price stability are not mutually exclusive.
“In other words, the central bank will implement reforms and use past experiences to form the best monetary policy in order to achieve ‘unmatched prosperity’ in the years to come,” Warsh said.
He acknowledged ongoing economic and geopolitical uncertainties while arguing that appropriate policy choices could strengthen long-term economic conditions.
Warsh said he was “not naive about challenges we face,” but maintained that the US economy could achieve “unmatched prosperity” with the right policy framework.
Trump emphasizes Fed independence
Donald Trump presided over the swearing-in ceremony at the White House. He stressed that Warsh should operate independently despite longstanding tensions between Trump and the Federal Reserve over interest rate policy.
“I want Kevin to be totally independent,” Trump said at the beginning of the event. “Don’t look at me, don’t look at anybody.”
The ceremony marked the first time since 1987 that a Fed chair was sworn in at the White House, when Alan Greenspan took office.
The event included senior political and judicial figures, including Supreme Court Justices Clarence Thomas and Brett Kavanaugh, with Thomas administering the oath.
Markets focus on rates and inflation outlook
Warsh takes over the Fed at a time when markets remain focused on inflation, interest rates, and the trajectory of the US economy.
Although Trump frequently criticized Powell during his tenure for not cutting rates aggressively enough, markets currently expect the Fed to remain largely on hold through much of 2026.
Warsh previously served as a Fed governor between 2006 and 2011 during the global financial crisis before later criticizing aspects of the central bank’s prolonged crisis-era policies.
Since leaving the Fed, Warsh has worked at Stanley Druckenmiller’s Duquesne Family Office and served as a lecturer at Stanford University and the Hoover Institution.
Policy watchers are expected to closely monitor whether Warsh follows through on his pledge to reshape the Fed’s policy approach while balancing inflation control, economic growth, and financial market stability.
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