The new chairman of the Federal Reserve is sworn in! Trump calls for "restraining inflation, not greatness," and Powell states that he wants to be like Greenspan.

The Federal Reserve welcomes a new leader, but the policy game behind the power transfer has quietly begun. On Friday local time, Kevin Warsh was officially sworn in as the head of the Federal Reserve at the White House, with a four-year term that will expire on May 21, 2030. During the ceremony, Trump verbally supported the central bank's independence, but then quickly changed his tone and publicly outlined his hopes for the new chairman to pursue an economic philosophy - that economic prosperity should not be constrained, and strong growth will not lead to inflation. Warsh then made a brief speech, saying it was "a lifelong honor to be called back to public service." He said: To fulfill this mission, I will lead a reform-oriented Federal Reserve, learning lessons from past successes and failures, breaking free from rigid frameworks and models, while adhering to clear standards of integrity and performance. Warsh emphasized that the Fed should fulfill its responsibilities of controlling inflation and achieving full employment with "independence, clear judgment, and a firm stance." He also stated that the Fed's mission is to "maintain price stability and achieve maximum employment." This is a crucial moment for monetary policy and the U.S. economy. Warsh's wide-ranging criticisms of current Fed officials, rate-cutting strategies, and his relationship with President Trump have helped him outshine other competitors in the race to lead the Fed. Meanwhile, inflation remains high and may continue to rise as the U.S. economy faces multiple challenges, including the possibility of war between the U.S. and Israel and Iran pushing oil prices above $100 per barrel, high import tariffs, and rising costs due to the proliferation of artificial intelligence. Trump's contradictory implications: Warsh is to be like Greenspan, not Bernanke On Friday, Warsh, in a dark suit and tie, was sworn in at the White House with his wife, Jane Lauder, the heiress to the Este Lauder fortune, by Supreme Court Justice Clarence Thomas. The ceremony was attended by several cabinet officials, including Treasury Secretary Benson, and many of Warsh's old friends, such as former Secretary of State Condoleezza Rice. At the ceremony, Trump first endorsed the Fed's independence, saying he hoped Warsh would be "completely independent" and "not look at me, not look at anyone." But before the endorsement could settle, Trump quickly got to the point. He said: When the economy is booming, it is a good thing, we don't need excessive intervention, just let it prosper. He also directly stated his position: We want to curb inflation, but we don't want to curb greatness. These two seemingly contradictory statements actually form a complete logic: acknowledging independence while laying the groundwork for a low-interest rate policy. In his brief remarks, Warsh rarely touched on policy details but deliberately referred to former Chairman Greenspan as a reference, saying: I will fulfill this responsibility with vitality and a sense of mission in the manner of Chairman Greenspan. It is worth noting that Warsh served under former Fed Chairman Bernanke for five years but did not mention him at all. This deliberate omission, in line with Warsh's previously expressed reform stance, suggests that he advocates returning the Fed to a more streamlined and less prominent institution as it was before the Bernanke era. Referring to Greenspan rather than Bernanke is a style statement as well as a policy metaphor. Committee system: the real challenge facing Warsh The Federal Reserve's interest rate decisions are made by a voting Federal Open Market Committee, and the chairman does not have a veto. What Warsh needs to convince are the other 11 voting committee members, most of whom were not nominated by Trump, and Warsh does not have the power to replace them. Trump has given an optimistic prediction for this. He said that other decision-makers "will make their own decisions" but "will always listen to Warsh," and even committee members with "different views" will tend to follow Warsh's direction out of "respect." However, the challenges of reality cannot be ignored. There are increasingly more Fed officials expressing concerns about rising prices. If Warsh wishes to push for a low-interest rate path, he must win the approval of the committee on the policy logic, rather than relying on the halo of the chairmanship. Wall Street Watch mentioned that on Friday, Fed Governor Waller made a hawkish speech, explicitly stating that inflation is the "DRIVE" for future policy decisions, and that future rate hikes and rate cuts are "fifty-fifty." This statement directly fueled expectations of rate hikes. Inflation pressure and dilemma: facing a policy test as soon as he takes office At 56, Warsh won Trump's support after a year-long public "audition" among top candidates. During this period, the new chairman set ambitious reform goals for the Fed - he believed that when he resigned as a director in 2011 due to his opposition to Fed bond purchases, the Fed had already lost its way. However, now, his first few months in office may be occupied by a more urgent dilemma: whether to raise rates to prevent inflation from further deviating from the Fed's 2% target, or to risk his reputation as an inflation fighter from the start. As the 11th chairman of the Federal Reserve, Warsh will have to look ahead and look back from the beginning: on the one hand, global bond markets have started to push interest rates higher, showing increasing concerns about inflation; on the other hand, colleagues like Waller have begun to create expectations of possible rate hikes; Then there's Trump, who has always seen rate hikes as a political attack on his economic plans and sharply criticized Powell for not lowering borrowing costs. The next Fed meeting is scheduled for June 16-17, where policymakers will vote on interest rates and a new policy statement and submit new economic forecasts. This article is from "Wall Street Watch," by authors Yi Long Bao, Hao He, and editor Li Cheng.