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Kevin Warsh has been sworn in as chair of the US Federal Reserve, tasked with steering the world’s largest economy as the Trump administration faces mounting pressure over Americans’ financial wellbeing.
Warsh, handpicked by Donald Trump, takes charge of the powerful central bank as it comes under extraordinary pressure from the US president to cut interest rates, even as prices climb.
While Trump faces growing criticism over his handling of the economy, Warsh will now chart a course through an uncertain outlook, darkened by the US-Israel war on Iran.
The former Fed governor and Wall Street banker succeeds Jerome Powell, who repeatedly warned over the inflationary risks of Trump’s agenda, and whom the president vehemently attacked for his refusal to cut rates. (Powell was once handpicked by Trump, too.)
“I expect he will go down as one of the truly great chairmen as the Federal Reserve that we’ve ever had,” Trump declared of Warsh during a ceremony at the White House on Friday morning, claiming that “no one in America is better prepared” for the role.
Warsh took the oath, administered by US supreme court Justice Clarence Thomas, whom he later called “an esteemed friend”, as his wife Jane Lauder held a Bible.
The new Fed chair pledged to lead a “reform-oriented Federal Reserve”, adding: “Inflation can be lower, growth stronger, real take-home pay higher, and America can be more prosperous, and no less important.”
With millions of Americans set to hit the road over Memorial Day weekend, and US fuel prices at their highest levels in years, 68% of Americans believe Trump is prioritizing his controversial immigration crackdown at the expense of their economic wellbeing, according to a new poll.
Amid growing discontent about the economic costs of his decision to go to war with Iran, 68% of respondents said Trump’s administration is too focused on mass deportations and not enough on affordability issues.
The poll, from Morris Predictive Insights, illustrates the strength of the political backlash facing Trump following criticism of his admission that financial pressures on Americans from the Iran war “not even a little bit” driving him to reach a peace deal with Iran’s Islamic regime.
The nationwide average US fuel price stood at $4.55 a gallon on Friday, according to AAA, up $1.35 a gallon from where they stood a year ago.
Inflation hit a three-year high of 3.8% in April.
Trump has been waging an unprecedented battle to exert greater control over the Fed, raising fears over the future of its longstanding independence.
“I want Kevin to be totally independent. I want him to be independent and just do a great job,” Trump claimed on Friday, telling Warsh: “Don’t look at me. Don’t look at anybody. Just do your own thing, and do a great job.”
This apparent encouragement to ignore his opinions was somewhat undermined by what Trump said next. “Unfortunately, in the eyes of many, the Fed lost its way in recent years,” he said.
At a hearing before the Senate banking committee in April, Warsh said he would maintain Fed independence. But his refusal to answer whether Trump lost the 2020 election raised alarm among Democrats.
“Kevin Warsh starts his tenure with his credibility in tatters,” Elizabeth Warren, the banking committee’s top Democrat, said on Friday. “Having proven himself to be Donald Trump’s sock puppet, I worry Mr Warsh will prioritize the President’s political interests over the economic wellbeing of American families.”
Inside the east room of the White House, Warsh received a standing ovation from attendees including US supreme court Justice Brett Kavanaugh, former vice-president Dan Quayle, ex-secretary of state Condoleezza Rice, treasury secretary Scott Bessent, and national economic council director Kevin Hassett. (Hassett was also widely reported to be in the running to succeed Powell as Fed chair.)
Warsh said: “While I’m not naive about the challenges we face, I believe, Mr President, these years can bring unmatched prosperity that will raise living standards for Americans from all walks of life, and the Fed has something to do with it.”
But beyond the White House, a growing number of Americans appear to be souring on Trump’s economic record. The Morris survey was no outlier. A separate poll from Gallup showed confidence in the economy at a four-year low.
Nearly half of all respondents, 49%, rated the current state of the economy as poor, against another 34% who ranked it as only fair. Just 16% of Americans rated current economic conditions as excellent or good. A mere one in five said conditions were improving.
But it was the Morris survey that most graphically illustrated Trump’s political problem, showing that dissatisfaction lay across the ideological spectrum and on policy areas that were key to his 2024 election win.
Even among Trump voters, 36% believe his administration has the wrong priorities, according to the survey. The figure was 70% among voters who said they had abandoned their previous support for Trump. And among loyal Trump voters, more than one-quarter, 27%, believe the president is on the wrong track.
On his one-time signature issues – the economy and immigration – disapproval ratings now sit at -35% and -13%, respectively.
The polls also showed a majority of voters, 53%, favor redirecting spending away from immigration enforcement towards either reducing food and grocery costs, or lowering health costs and supporting programs such as Medicaid.
A similar figure believe mass deportation of immigrant workers is damaging the economy by raising costs for US families. Some 56% say it is tearing families apart and driving up costs for everyone, as against 34% who say it is making the country safer.
There are also solid majorities criticizing immigration enforcement as “going too far” when it results in higher grocery bills after farm and food workers are deported, immigrant children disappear from school classrooms, elderly people and families are left without care workers, and restaurants are forced to close because workers have been expelled from the country.
In a warning sign for Republicans in the congressional midterm elections, the poll shows 16% of Trump’s 2024 voters no longer planning to vote for the party in November. The primary reason is the faltering economy and rising living costs, cited by 51% of the cohort. Another 36% said they were put off by the president’s personal conduct and rhetoric, while 24% blamed immigration enforcement and deportations.
