Trump's Handpicked Fed Chair Holds Interest Rates Exactly Where His Predecessor Left Them, Resolving Long-Standing Concern That Monetary Policy Was Still Being Set By Someone The President Did Not Personally Swear In

The Filing

WASHINGTON. President Donald J. Trump secured another milestone in the long project of bringing the nation's central bank under presidential supervision Wednesday, as Federal Reserve Chairman Kevin Warsh concluded his first rate-setting meeting by leaving the benchmark interest rate precisely where his predecessor had left it, in a range of 3.5 to 3.75 percent.

The hold, the fourth in a row by the Federal Open Market Committee, resolved a long-standing concern within the administration that the most consequential economic decisions in American life were still being made by an official the president had not personally selected, confirmed by the narrowest margin in Senate history, and sworn into office at a White House ceremony the president himself presided over.

Warsh, nominated in January and confirmed in May by a vote of 54 to 45, succeeded Jerome Powell, whom Mr. Trump had criticized for years over his refusal to cut rates as quickly or as deeply as the president wished. Powell, who served eight years as chairman, has remained at the Fed as a governor, the first former chair to do so in nearly eight decades, an arrangement administration officials described as a reassuring daily reminder of who is no longer in charge.

The achievement arrived at a delicate moment. Inflation reached an annual rate of 4.2 percent in May, its highest level since April 2023, propelled in large part by the oil and gas price shock that followed the Iran war the president had helped to wage. Several economists now believe the central bank's next move may be to raise interest rates rather than lower them, an outcome that would run directly counter to the president's stated preferences. "Higher interest rates keep the country down," Mr. Trump told reporters in Paris, where he was attending the Group of Seven summit, before adding of his chosen chairman, "We have a very good guy over there now."

Warsh, for his part, has pledged that the Federal Reserve will remain "strictly independent" in its conduct of monetary policy, a pledge officials hailed as proof that the institution's autonomy remained fully intact and entirely within the president's gift to confer. Sources within the administration noted that the new chairman had already signaled plans to reshape how the Fed communicates with the public and to offer markets less guidance about its future moves, steps the White House characterized as restoring accountability to a body that had operated for too long without it.

At press time, the president was said to be weighing whether the surest way to guarantee the central bank's independence going forward would be to choose its next several chairmen himself.

Who Benefits

§Donald J. Trump, who now presides over a Federal Reserve led by a chairman he nominated, saw confirmed by the narrowest Senate margin in history, and personally swore in, completing a years-long campaign to make the central bank answerable to the White House regardless of any single meeting's outcome.
§The administration's strongman and economic-control branding, which recast the capture of an independent institution as a long-overdue restoration of accountability.
§Kevin Warsh, elevated to one of the most powerful economic positions in the world.
§The president's allies and Jerome Powell's critics, who secured the removal of a chairman who had resisted political pressure to cut rates.
§Wall Street and institutional investors, handed a known, market-friendly quantity at the head of the Fed amid an inflation scare.
§The theory of expansive presidential authority over independent agencies, advanced another step toward treating the Fed like any other arm of the executive branch.
§Future presidents, who inherit the precedent that a Fed chair may be replaced mid-cycle with a handpicked loyalist and sworn in at the White House by the president personally.

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