WASHINGTON: Kevin Warsh was sworn in as chair of the US Federal Reserve on Friday at a pivotal moment for an American economy where surging gasoline prices due to the Iran war are pushing up inflation and eroding consumer sentiment, potent ingredients for a policy dilemma with political implications.Warsh, wearing a dark suit and tie and accompanied by his wife, Jane Lauder, heiress to the Estee Lauder fortune, was sworn in by Supreme Court Justice Clarence Thomas after a lengthy introduction by President Donald Trump. The White House’s East Room was peppered with top cabinet officials, including Treasury Secretary Scott Bessent, and longtime friends of Warsh, including former Secretary of State Condoleezza Rice.Trump, who has been incessant in his criticism of former Chair Jerome Powell for not slashing interest rates, said Warsh would have the “full support of my administration” and wanted him to be “fully independent” in his new role, but also urged him to recognize that “growth does not mean inflation”.Calling it the “honour of a lifetime to be called back into public service”, Warsh, in brief comments afterward, said: “To fulfill this mission, I will lead a reform-oriented Federal Reserve, learning from past successes and mistakes, both escaping static frameworks and models and upholding clear standards of integrity and performance.”Awaiting him is an unfolding boom in AI technology that is reshaping the economy in ways Fed officials say could be profound for workers, companies and consumers, but will be hard for Warsh and his colleagues to assess in real time. At the same moment, inflation is high and potentially heading higher as the economy copes with shocks including oil driven over $100 a barrel by the US-Israeli war with Iran, high import tariffs, and utility and other costs rising due to the AI rollout.“Our mandate at the Fed is to promote price stability and maximum employment,” Warsh said. “When we pursue those aims with wisdom and clarity, independence and resolve, inflation can be lower, growth stronger, real take-home pay higher, and America can be more prosperous-and no less important, America’s place in the world more secure.”This is a Reuters story
