Kevin Warsh Sworn In as Fed Chair

CNBC reported Friday that President Donald Trump swore in Kevin Warsh as the new chair of the Federal Reserve, placing him atop a central bank that faces both economic uncertainty and direct presidential pressure to cut interest rates.

Warsh, 56, becomes the 11th Fed chair of the modern era. He replaces Jerome Powell, whose eight-year tenure drew repeated and pointed criticism from Trump over what the president viewed as insufficient urgency on rate reductions.

A Contentious Handover at the Fed

Powell will not leave the institution entirely. He remains at the Fed as a governor, a move that has no precedent in roughly eight decades. His tenure was defined in part by a prolonged stretch of inflation running above the Fed’s 2% target and by frequent personal attacks from Trump, who accused him of suffering from what the president called “Trump derangement syndrome.”

During that period, the Fed cut its benchmark rate by three-quarters of a percentage point and raised it by 4.25 points across a separate cycle during the Biden administration. Trump wanted cuts to come faster and go further.

Background: Warsh’s Path to the Top Job

This is Warsh’s second tour at the Fed. He previously served as a governor from 2006 to 2011, a stretch that included the global financial crisis. He helped steer the central bank’s emergency response during that period, but later turned critical of the Fed for keeping crisis-era measures in place too long.

Since departing, Warsh has worked at Stanley Druckenmiller’s Duquesne Family Office and has lectured at Stanford University and the Hoover Institution. He was widely considered a frontrunner for the chair role years earlier, but Trump selected Powell at the time, reportedly following advice from former Treasury Secretary Steve Mnuchin.

Warsh secured the nomination after a selection process that began in the summer of 2025 and reportedly involved as many as 11 candidates drawn from current and former Fed officials, economists, and Wall Street strategists.

Markets Are Not Buying the Rate Cut Narrative

Despite the change in leadership, traders are not pricing in the aggressive easing that Trump has long sought. Rate futures markets currently reflect expectations that the Fed will hold rates steady for most or all of 2026, with some positioning pointing toward potential hikes in early 2027.

Warsh has said he can bring inflation under control while simultaneously lowering rates, a dual ambition that markets appear skeptical of for now. How he navigates that tension with a vocal president watching closely will define the early months of his tenure.

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