Warsh Sworn In as Fed Chair Amid Inflation Surge

Rising inflation now threatens to block the interest rate cuts President Trump has long demanded from the Federal Reserve. Kevin Warsh took the oath as the central bank’s 11th chair on Friday at the White House, stepping into an economy where oil prices have climbed above $100 a barrel after the U.S.-Israeli conflict with Iran, tariffs have raised import costs, and an artificial-intelligence investment wave is pushing up utility bills. These pressures have already lifted inflation more than a percentage point above the Fed’s 2 percent target, leaving markets to price in a possible rate increase rather than a cut this year.

Warsh, 56, resigned as a Fed governor in 2011 over objections to large-scale bond purchases. He has since criticized the institution’s expansion into environmental and diversity programs and its prolonged quantitative-easing policies. Trump replaced Jerome Powell after Powell resisted rate cuts and now plans to keep Powell on the Board of Governors, a move that could keep internal resistance to White House pressure in place. The next policy meeting is scheduled for June 16-17, when Warsh will cast his first vote and submit his first interest-rate projection.

Warsh has said inflation remains “the Fed’s choice” through its control of short-term rates. Yet he has also argued that the funds rate is not the main driver of price pressures and that the Fed’s nearly $7 trillion balance sheet must be reduced. Colleagues including Governor Christopher Waller have already signaled greater caution about easing, while Trump has offered mixed signals about how much slack he will grant his new appointee. The central tension is whether Warsh can maintain credibility on inflation while managing expectations from an administration that views higher borrowing costs as a political obstacle.