The Fed has a new boss. Kevin Warsh took the oath of office on Friday in front of Supreme Court judges, top aides, and a White House crowd.
He starts the job with the U.S. president openly pushing for lower rates.
What Happened In The East Room
Warsh was sworn in as the 17th chair of the Fed on May 22 in the East Room of the White House.
Justice Clarence Thomas gave the oath. Warsh's wife held the Bible.
That setting is rare. The last time a Fed chair took the oath at the White House was Alan Greenspan in 1987.
Most chairs are sworn in at the Fed itself. The change in venue sent a small but pointed signal.
The White House wants the new chair tied to the Trump push for cuts.
Warsh used his remarks to set the tone. He said the Fed's job is price stability and a strong job market.
He also said he plans to run a reform-minded Fed.
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The Job Warsh Is Walking Into
President Trump spoke at the event. He said he wants Warsh to be totally on his own and do a great job.
Trump has pushed for lower rates for the past year. Warsh has said he will not let politics decide rate calls.
He told lawmakers he will never lock in a rate move at the request of the president.
The job he is walking into is tough. Prices are still above the Fed's 2 percent goal.
Prices jumped again in March on the back of higher oil from the Iran war. The job market is mixed. Some sectors are still adding workers each month, while others have stalled.
That split makes the case for a cut harder to build. Wall Street is not betting on a cut at the June meeting.
By year end, traders see better than even odds that rates end up higher than they are now.
What To Watch
Warsh does not get to set rates on his own. He chairs a 12-person panel.
At least three of those members pushed back at even hinting at cuts at the last meeting. He has to bring people along.
There is a twist in the room. Jerome Powell is staying on the Board of Governors.
That means the man Warsh just replaced still has a vote on every rate call.
Powell said he will stay until the probe into his congressional testimony is over. He has chaired the Fed since 2018.
He led the bank through the pandemic and the price surge that followed.
The June meeting is the first real test of the new era. The market will watch every word Warsh says in his first press talk.
The bond market is also a key signal. The 30-year Treasury yield just crossed 5 percent for the first time since 2007.
That tells you investors expect more rate friction than relief.
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