Trump tells new Fed chair Warsh to be 'totally independent' after year-long Powell feud

President Donald Trump swore in Kevin Warsh as the 11th chair of the Federal Reserve at the White House on Thursday, telling the longtime central bank critic to be "totally independent" just months after a sustained public campaign to bend his predecessor to the administration's rate-cut demands.

"I want Kevin to be totally independent. I want him to be independent and just do a great job. Don't look at me, don't look at anybody. Just do your own thing and do a great job," Trump said at the East Room ceremony, according to PBS NewsHour's live coverage. Supreme Court Justice Clarence Thomas administered the oath.

The optics were unusual on their own. It was the first time a Fed chair has been sworn in at the White House since Alan Greenspan in 1987, NBC News reported. Most modern chairs have taken the oath at the Fed's Eccles Building, a deliberate gesture toward the central bank's distance from the executive branch.

Warsh, 56, was confirmed by the Senate on May 13 in a 54–45 vote, the narrowest margin for any Fed chair in history. Sen. John Fetterman of Pennsylvania was the only Democrat to back him, the Washington Times reported.

An independence pledge with an asterisk

Trump's call for independence sits awkwardly against the record. Over the past year he called outgoing chair Jerome Powell a "dummy" and a "stupid man," attempted to fire him, and backed a Justice Department criminal investigation into the Fed's headquarters renovation. Prosecutors led by U.S. Attorney for D.C. Jeanine Pirro dropped the probe in April after finding no evidence of wrongdoing, Al Jazeera reported.

Powell, who declared in January that the Fed had received "grand jury subpoenas, threatening a criminal indictment," has chosen to stay on the Board of Governors through January 2028 rather than retire, a decision he tied to the administration's pressure campaign.

Jerome Powell, outgoing Fed chair

Trump has also been explicit about what he expected from his nominee. In a February Oval Office interview with NBC Nightly News, he said Warsh "would not have gotten the job if he didn't want to cut rates." On Thursday he added a softer version of the same message: "We want to stop inflation, but we don't want to stop greatness."

Warsh, for his part, told the Senate Banking Committee during his confirmation hearing that "the president never asked me to predetermine, commit, fix, decide on any interest rate decision in any of our discussions, nor would I ever agree to do so." In his East Room remarks he pledged to "lead a reform-oriented Federal Reserve" focused on price stability and maximum employment.

David Wessel, a senior fellow at the Brookings Institution, offered the analyst consensus in a single line to Yahoo Finance: "Watch what he does, not what he has said."

The 'regime change' agenda

The rate-cut drama has overshadowed what may prove the more consequential story. Warsh has described his plans as a "regime change" inside the central bank, with three structural targets, as outlined in CNBC's analysis:

• Shrinking the Fed's roughly $6.8 trillion balance sheet, a legacy of post-2008 and pandemic-era asset purchases.
• Scrapping the dot plot, the quarterly chart of policymakers' rate projections that has anchored forward guidance for more than a decade.
• Overhauling the Fed's internal forecasting models, which Warsh has criticized for missing both the 2021–22 inflation surge and the subsequent disinflation.

None of those changes require a vote of Congress. All of them would reshape how markets read the Fed for years. Warsh resigned from the Fed Board in 2011 over disagreements with then-chair Ben Bernanke's quantitative easing program, and he has spent the years since at the Hoover Institution and alongside investor Stanley Druckenmiller arguing that the post-crisis Fed grew too large and too predictive.

The harder fight may be inside the FOMC

The more immediate constraint on Warsh is not the White House but his own committee. The Federal Open Market Committee was at its most divided since 1992 at its April meeting, with four of 12 voting members dissenting. The benchmark rate sits at 3.50%–3.75% after three small cuts in late 2025 and a pause this year.

The inflation backdrop has worsened. April CPI rose 3.8% year-over-year, the highest reading in three years and nearly double the Fed's 2% target. Oil prices remain elevated following the U.S. war with Iran that began on February 28.

Hours before Warsh took the oath, Trump-appointed Fed governor Christopher Waller flatly contradicted the president's rate-cut wish.

I can no longer rule out rate hikes further down the road if inflation does not abate.

Christopher Waller, Federal Reserve governor

Waller's comment, reported by NBC News, suggests Warsh will inherit a committee where the policy gravity is pulling toward tighter, not looser, money. A chair who pushes for cuts against that current risks the kind of dissent-laden votes that erode market confidence faster than any presidential tweet.

What to watch on June 16

Warsh's first FOMC meeting as chair is scheduled for June 16–17. Sen. Elizabeth Warren, who voted against him, warned during the confirmation fight that Warsh would serve as a presidential "sock puppet." The Supreme Court is separately weighing whether Trump had the authority to fire Fed governor Lisa Cook, a case that could redraw the legal perimeter of Fed independence regardless of what Warsh does.

For markets, the early signal will be procedural as much as substantive. A hold on rates paired with concrete steps to retire the dot plot or accelerate balance-sheet runoff would tell one story. A surprise cut with a divided vote would tell another. So would a unanimous hold.

"Watch what he does, not what he has said" applies to the president in the East Room too.