Kevin Warsh Confirmed as Fed Chair Amid Trump Influence
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- Kevin Warsh was confirmed by the U.S. Senate on Wednesday as the new Federal Reserve chair.
- Donald Trump pressed Warsh on his willingness to support interest‑rate cuts and said the Fed chair should consult the President when setting rates.
- Kevin Warsh told the Senate Banking Committee in April that Trump never asked him to commit to any specific rate decision and he would not agree to such pressure.
- Jerome Powell will remain a Fed board member, the first outgoing chairman to do so since 1948, citing worries about Fed independence.
- Kevin Warsh argued that a gradual reduction of the Fed’s roughly $7 trillion balance sheet and AI‑driven productivity gains would create room for lower rates despite inflation above the 2% target.
Why it matters: Borrowers will benefit from lower rates as Warsh pushes a $7 trillion balance‑sheet trim, while investors will see heightened Treasury volatility as Fed independence is questioned.
