US Fed Appoints Powell as Interim Chair Pending Warsh's Inauguration

The US Federal Reserve (Fed) appointed outgoing Chairman Jerome Powell as interim chairman today, pending the inauguration of his successor, Kevin Warsh, whose appointment was confirmed by the US Senate earlier this week. In a statement, the Fed said: 'This temporary move to appoint the current chairman as interim chair is consistent with similar chairman transition periods in the past.' Powell’s second four-year term ended today. Powell will serve as interim chair until Warsh, a nominee of US President Trump, is inaugurated after undergoing a rigorous confirmation process. The Fed has not yet provided a start date for the new chair. The US Senate confirmed Warsh’s appointment on the 13th by a 54-45 vote, with Republicans using their narrow majority to ensure Trump’s nominee was confirmed. The process was previously stalled due to lawmakers’ opposition to the Department of Justice’s criminal investigation into Powell. Outgoing Powell had described this investigation as pressure on the Fed to influence its monetary policy decisions. Fed governors Stephen Miran and Michelle Bowman, both nominees of Trump, said in a statement that they agreed to appoint Powell as interim chair while awaiting Warsh’s inauguration, but did not support an indefinite term. They said, 'As we do not support an indefinite interim chair, we cannot support this action.' 'Given we have a confirmed nominee who will be sworn in soon, we believe the tenure of the interim chair should be limited to a period of at least one week (though we would support a maximum of one month to account for potential delays).' Warsh is known for his past 'hawkish' stance against inflation and quantitative easing (QE), but his position has shifted in recent years, aligning with President Trump’s push for lower interest rates, which will pose unprecedented challenges to the Fed’s independence.