Big change at the Fed. Donald Trump is counting on a new direction under Warsh's leadership
– I really think so. I want Kevin to be completely independent. I want him to be independent and just do a great job. Don't look at me, don't look at anyone, just do your thing and do a great job, Trump said.
At the same time, the president did not spare criticism towards the previous head of the Fed, Jerome Powell. According to the Polish Press Agency, he accused him of abandoning the basic mission of the central bank and focusing on climate policy and DEI (anti-discrimination) initiatives. Trump emphasized that as a result of these actions, Americans experienced record inflation.
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Independence versus expectations
Although Trump declares that he does not want to influence the Fed's decisions, he clearly indicated his expectations: during a period of economic growth, interest rates should fall, not rise. This approach goes against the standard practice of central banks, which usually raise the cost of money to cool inflation.
The president expressed confidence that Warsh — whom he described as “exceptionally competent and widely respected” — would be able to convince Fed policymakers to adopt such a course.
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A difficult moment for the new head of the Fed
Warsh himself said he would lead the central bank with “independence and determination”, while signaling the need for reforms. He will take up the position at a challenging time: inflation is accelerating again, including due to geopolitical tensions, and the issue of Fed independence returns to public debate.
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During his Senate hearing, Warsh assured that he would not be a “puppet” of the president. Nevertheless, his nomination passed with relatively low support – 54 votes in favor, which is one of the worst results for the head of the Fed.
Trump does not hide that he hopes to cut interest rates. However, economists remain skeptical – with increased inflation, such a scenario is considered unlikely in the near future.
One of the richest people in this position
Warsh is also one of the wealthiest Fed presidents in history. Privately, he is the son-in-law of billionaire Ronald Lauder. According to his asset declarations, he and his wife have assets worth at least $192 million. According to Bloomberg, Jane Lauder's fortune reaches up to $2.5 billion.
