WASHINGTON —  Kevin Warsh assumed his new role as chair of the Federal Reserve Friday after a swearing-in ceremony in the White House East Room, where U.S. Supreme Court Justice Clarence Thomas delivered the oath of office.

President Donald Trump said before a crowd of high-profile former and current lawmakers and officials that he wants Warsh, of Florida, to be “totally independent.”

“I want him to be independent and just do a great job. Don’t look at me, don’t look at anybody, just do your own thing and do a great job,” Trump said.

Warsh vowed to be a “reform-oriented” leader in brief remarks after he was sworn in as the 17th Fed chair by Thomas. Warsh’s wife, Jane Lauder, held a Bible for him.

“Our mandate at the Fed is to promote price stability and maximum employment. 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,” said Warsh, who previously served as a Fed board governor during the 2008 global financial crisis.

Also at the ceremony was Supreme Court Justice Brett Kavanaugh, whom Warsh worked with at the White House during President George W. Bush’s administration. 

Trump attacks on Powell

Warsh’s swearing-in ceremony caps Trump’s long campaign of public attacks on former Fed Chair Jerome Powell, appointed by the president during his first term in 2018. 

Trump ramped up threats over the past year to fire and replace Powell if he did not lower interest rates.

With the November midterms less than six months away, Trump is increasingly facing economic headwinds as inflation hit its highest mark last month since 2023, and the president’s approval ratings on the cost of living continue to sag.

Trump’s feud with Powell reached a boiling point in January when the Department of Justice opened a criminal probe into Powell and the central bank over the multibillion-dollar cost to renovate the Fed’s Washington, D.C., headquarters. After being subpoenaed, Powell issued a rare public video statement dismissing the investigation as a maneuver to weaken the Fed’s independence.

Trump’s investigation into Powell marred his nomination of Warsh, even within his own party. The retiring U.S. Sen. Thom Tillis, R-N.C., withheld his key committee vote to advance Warsh’s nomination to the Senate until the Department of Justice announced in late April it would drop the probe. 

Just over a month prior to the administration nixing the case, a federal judge had blocked the DOJ’s criminal subpoenas, citing “abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair.”

Trump is also tangled in litigation after attempting to fire Federal Reserve Gov. Lisa Cook. The Supreme Court is reviewing whether Trump overstepped his presidential authority when he fired her without cause.

‘Sock puppet’

Sen. Elizabeth Warren, the top Democrat on the Senate Committee on Banking, Housing and Urban Affairs, issued a scathing statement Friday morning questioning Warsh’s transparency about his investments during the nomination process, and alleging he will not remain independent from the president.

“Kevin Warsh starts his tenure with his credibility in tatters. Having proven himself to be Donald Trump’s sock puppet, I worry Mr. Warsh will prioritize the President’s political interests over the economic well-being of American families,” said Warren, D-Mass.

Powell will stay on as a member of the Fed’s board of governors. 

WASHINGTON — Kevin Warsh will officially take the lead at the Federal Reserve after U.S. senators voted Wednesday to confirm the economist and former central bank governor to replace Chair Jerome Powell.

Senators approved Warsh 54-45 nearly along party lines. Democratic Sen. John Fetterman, D-Pa., broke ranks with his party to join Republicans in support of Warsh’s nomination. Sen. Kirsten Gillibrand, D-N.Y., did not vote.

Warsh, of Florida, takes the helm after President Donald Trump spent most of his second term haranguing and threatening to fire Powell if he did not lower interest rates.

Trump is also tangled in litigation over his firing last summer of Fed Governor Lisa Cook. The U.S. Supreme Court is currently reviewing whether Trump’s dismissal of Cook exceeded his presidential authority.

Dropped investigation

Trump’s ire for Powell escalated into a Department of Justice investigation in January that even angered some in Trump’s own party.

Sen. Thom Tillis, R-N.C., who sits on the narrowly divided Senate Committee on Banking, House and Urban Affairs, withheld his support for Warsh’s nomination until the administration dropped its probe into Powell’s handling of a multiyear renovation of the Fed’s Washington, D.C., headquarters.

The U.S. attorney’s office for the District of Columbia scrapped the investigation on April 24, but said the Fed’s inspector general would continue to examine cost overruns. The administration had accused Powell of lying to Congress about the price of renovations.

A federal judge dismissed DOJ’s criminal subpoenas into the Fed and Powell in March, citing in his order “abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair.”

Powell’s term as chair expires Friday. He will stay on as a sitting governor on the central bank’s board.

Democratic critique 

Sen. Chris Van Hollen, D-Md., criticized Warsh on the Senate floor ahead of Wednesday’s vote. Van Hollen said Warsh has done a “180-degree flip” on inflation since his time of arguing for higher interest rates as a Fed board governor during the 2008 financial crisis. The Maryland senator said Warsh is now a “super dove on interest rates.”

“Markets need confidence that monetary policy decisions are being made on the basis of economic evidence, not on the basis of political pressure or convenience,” Van Hollen said.

“That is especially important now, as prices are rising too fast and President Trump is still demanding a big cut in interest rates,” he added.

Inflation data released Tuesday showed a 3.8% increase year over year, the highest jump since 2023.

WASHINGTON — President Donald Trump’s pick to lead the Federal Reserve was one step closer to the job Wednesday after North Carolina Republican U.S. Sen. Thom Tillis cast the deciding vote to advance Kevin Warsh’s nomination to the full Senate.

Lawmakers on the Senate Committee on Banking, Housing and Urban Affairs voted 13-11 along party lines to move Warsh to the next step.

The potential turnover at the top of the Fed, which sets monetary policy, comes as Americans see higher costs hit their pocketbooks, particularly soaring prices at the gas pump, as the U.S.-Iran conflict disrupts worldwide energy supplies.

Tillis had withheld his support until the Trump administration announced Friday it would drop what the senator described as a “bogus” investigation of current Fed Chair Jerome Powell.

“It’s no secret that the reason that Mr. Warsh’s nomination could have been held up is because of my concern with the investigation. I want to thank the Department of Justice for the assurances that they gave me,” Tillis, R-N.C., said following the panel’s brief morning session that lasted just under 15 minutes.

“The fact of the matter is, this was based on two minutes of testimony. It was not criminal,” Tillis said of the DOJ’s probe into Powell’s June 2025 testimony to Congress on a major $2.5 billion renovation of the Fed’s Washington, D.C., headquarters.

The committee vote comes after Trump’s sustained verbal attacks on Powell over several months, including numerous public threats to fire the Fed leader if he did not agree to lower interest rates. `

A federal judge last month blocked the administration’s subpoenas to probe the Fed and Powell, citing “a mountain of evidence” that Trump was using the investigation to force Powell’s hand.

The Fed was scheduled to meet Wednesday afternoon to deliver its latest decision on interest rates, possibly the last under Powell, whose term expires May 15.

Inflation, affordability

The committee’s top Democrat, Sen. Elizabeth Warren of Massachusetts, said the vote brings Trump “one step closer to completing his illegal attempt to seize control of the Fed and to artificially juice the economy.” 

Inflation and affordability are emerging as major issues ahead of the 2026 midterm elections that will determine control of Congress. 

Sen. Raphael Warnock, D-Ga., said his constituents in Georgia and beyond “deserve to know that the Fed is on their side, maximizing their chances to keep a good paying job and keeping their lives affordable, not on the side of the president’s poll numbers or his political concerns as we approach the midterm.”

“Fed independence is not theoretical. It matters to the everyday lives of working families,” Warnock said.

According to a Reuters/Ipsos poll taken between April 24-27, 61% of Americans think the U.S. economy is on the wrong track. 

When asked about the costs and benefits of the war in Iran, only a quarter of respondents said they agreed the U.S. military operation was worth it, according to the Ipsos poll.

Americans have watched fuel prices climb in March and April after Iran retaliated against the U.S.-Israeli attacks by choking off the Strait of Hormuz, a narrow maritime passageway where, prior to the war, one-fifth of the world’s petroleum passed.

Gas prices climb

The average price across the U.S. for a gallon of regular gas reached $4.23 Wednesday, not only the highest price point since the U.S. launched operations in Iran on Feb. 28, but also the highest since July 2022, according to GasBuddy.  

Prior to the war, a gallon of regular hadn’t topped $3 all year.

A return to normal, free flow in the strait — which was about 140 vessels per day pre-war — appears out of reach at the moment, as Trump announced last weekend his negotiators pulled back again on attending talks in Islamabad.

Secretary of Defense Pete Hegseth sidestepped a question Wednesday regarding how much longer the war might last, asked by Rep. Chrissy Houlahan, D-Pa., before the House Armed Services Committee.

During the same hearing however, the Pentagon’s Jules Hurst III, acting undersecretary of war who oversees finances, did reveal the war had so far cost the U.S. $25 billion.

While the Fed’s inflation target is 2%, data released at the beginning of April showed prices for all items rose 3.3% over a year ago. The jump was largely driven by a 21% spike in fuel prices from February to March.

The Fed’s so-called “dual mandate” is to maximize employment and stabilize prices. The Fed primarily loosens or tightens the economy by adjusting interest rates — lowering them if the economy lags and inflation is too low, and raising them when inflation becomes too high.

Lisa Cook firing

Warren and Warnock also noted Trump’s ousting in August of Fed Governor Lisa Cook, appointed to the board by former President Joe Biden. The U.S. Supreme Court is reviewing whether Trump exceeded his authority in firing Cook.

Warnock said he was dissatisfied with Warsh’s written responses to additional questions sent after his April 21 nomination hearing before the committee.

“I asked, quote: ‘If President Trump, or any future president, attempts to unlawfully fire you without cause, would you leave the Federal Reserve?’ His response, quote: ‘I will not answer hypothetical questions of this nature,’” Warnock recounted.

“Well, this isn’t a hypothetical question. In fact, the president attempted to fire Governor Cook this in the past year, and the president has repeatedly mused about firing Chair Powell because he won’t bend to his interest rate demands — doing so as recently as two weeks ago,” Warnock said, referring to Trump’s comments during an April 15 Fox Business interview. 

Asked Wednesday afternoon if he thinks Warsh will persuade the Fed’s board of governors to lower interest rates, Trump told reporters, “They should because it’s a good time to lower them. We’re the most prime country anywhere in the world.”

Powell also faced questions Wednesday afternoon.

When asked whether he expects Warsh will remain independent of Trump, Powell said, “He testified very strongly to that effect in his hearing, and I’ll take him at his word.”

Jennifer Shutt contributed to this report.

WASHINGTON — The Department of Justice dropped its investigation Friday of the Federal Reserve and Chair Jerome Powell over building renovation costs, a move that could open the door for new Fed leadership next month — and signaled a victory for North Carolina Sen. Thom Tillis.

U.S. Attorney Jeanine Pirro said her office closed the probe after a request to the Fed’s inspector general to examine the cost overruns.

“The IG has the authority to hold the Federal Reserve accountable to American taxpayers. I expect a comprehensive report in short order and am confident the outcome will assist in resolving, once and for all, the questions that led this office to issue subpoenas,” Pirro wrote on X just after 10 a.m. Eastern.

Pirro said she “will not hesitate to restart a criminal investigation should the facts warrant doing so.”

Powell, whose term expires in May, has been the target of repeated public criticism from President Donald Trump, who threatened to fire the central bank’s chair if he did not lower interest rates.

The Trump administration’s criminal inquiry into Powell for a $2.5 billion renovation project at the Fed’s offices has been eyed with suspicion, including from his own party.

Tillis, R-N.C., said he would not vote for Trump’s pick to replace Powell, former Fed Board Governor Kevin Warsh, unless the administration dropped its “bogus” investigation.

A favorable vote by Tillis on the closely divided Senate Committee on Banking, Housing and Urban Affairs is necessary to advance Warsh’s nomination, as all panel Democrats oppose him.

Tillis’s office did not immediately respond for comment.

A federal judge last month blocked the administration’s subpoenas to probe the Fed and Powell.

The Department of Justice declined to comment and referred States Newsroom to Pirro’s social media post.

A White House official reaffirmed Pirro’s announcement Friday.

“American taxpayers deserve answers about the Federal Reserve’s fiscal mismanagement, and the Office of the Inspector General’s more powerful authorities best position it to get to the bottom of the matter. The White House remains as confident as before that the Senate will swiftly confirm Kevin Warsh as the next Federal Reserve Chairman to finally restore competence and confidence in Fed decision-making,” White House spokesperson Kush Desai told States Newsroom in a statement.

Sen. Elizabeth Warren, D-Mass., issued a statement dismissing the DOJ’s announcement as “an attempt to clear the path for Senate Republicans to install President Trump’s sock puppet Kevin Warsh as Fed Chair.”

“Let’s be clear what the Justice Department announced today: they threatened to restart the bogus criminal investigation into Fed Chair Powell at any time while failing to drop their ridiculous criminal probe against Governor (Lisa) Cook. Anyone who believes Donald Trump’s corrupt scheme to take over the Fed is over is fooling themselves,” she wrote on X and Bluesky late Friday morning, referring to Trump’s abrupt August firing of Feb Board Governor Cook over alleged financial fraud.

Cook successfully challenged her firing in two lower courts. The U.S. Supreme Court is reviewing whether Trump legally dismissed Cook. 

Trump, who routinely posts about news of the day on his own social media platform Truth Social, had not commented on the announcement as of 12:30 p.m. Eastern.

During an unrelated Oval Office event Thursday, Trump sidestepped a question about what he hoped to learn from Pirro’s investigation into Powell and the Fed.

Instead, Trump responded by saying he could have completed the Fed’s Washington, D.C., headquarters renovation for $25 million and “had money left over.”

“On top of that, he’s been terrible on interest rates because he should have lowered interest rates. That’s why call him Jerome ‘too late.’ ‘Too late’ — that’s his nickname — Jerome ‘too late’ Powell. He likes me a lot,” Trump said.

Jennifer Shutt contributed to this report.