President Trump said on Tuesday that he won’t interfere with the policy decisions of Kevin Warsh, who is set to be sworn in on Friday to replace Fed Chair Jerome Powell. Warsh will become the central bank’s 17th leader after the Senate approved his nomination in a 54–45 vote last week.
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“I’m going to let him do what he wants to do,” Trump told the Washington Examiner. “He’s a very talented guy, he’s going to be fine, he’s going to do a good job.”
Rate-Cut Pressure, Inflation Concerns Cloud Fed Outlook
Since the start of his second term, Trump has pushed for lower interest rates from Powell, raising concerns about potential threats to Fed independence. Those concerns intensified after the Justice Department launched an investigation into Powell over the central bank’s billion-dollar renovation of its Washington, D.C., headquarters, although the probe was later dropped. Powell labeled the investigation as punishment for the Fed setting rates independently instead of adhering to Trump’s demands.
Warsh is set to inherit a divided Fed as concerns of inflation climb. The Consumer Price Index (CPI) rose 3.8% for the 12 months ended April, marking the highest rate since 2023.