Kevin Warsh, the new chairman of the US Federal Reserve, vowed to be “reform-oriented” as he was sworn in at the White House on Friday, with President Donald Trump insisting the head of the central bank be “absolutely independent”.

Trump has put unprecedented pressure on the central bank to cut interest rates, sought to fire a Fed governor and pursued a criminal investigation into Warsh’s predecessor, Jerome Powell.

“To accomplish this mission, I will lead a reform-oriented Federal Reserve, learning from past successes and mistakes, moving beyond both static frameworks and models, and upholding clear standards of integrity and performance,” Warsh said.

He called on central bankers to pursue their goals “with wisdom and clarity, independence and resolve”, adding that “inflation can be lower, growth can be stronger, real take-home wages can be higher and America can be richer if they do”.

Trump, who has repeatedly criticized and insulted Warsh’s predecessor Jerome Powell, praised Warsh and said he wanted him to be completely independent, before urging the Fed chairman to let the economy “boom.”

“Kevin understands that when the economy booms, that’s a good thing. We want to stop inflation, but we don’t want to stop greatness,” Trump said.

Warsh has backed rate cuts in the past even as the world’s largest economy faces three-year highs in inflation.

Justices Clarence Thomas and Brett Cavano were among those present Friday, with the former administering the oath of office to Warsh.

It is unusual for the head of the Fed — an independent nonpartisan body that sets monetary policy according to the dual mandate of inflation and employment — to be sworn in at the White House.

The last central bank chief to do so was Alan Greenspan under President Ronald Reagan in 1987.

At his Senate confirmation hearing, Warsh insisted that he would “absolutely not” be a puppet for the president.

– balanced command –

Warsh will take over a divided Fed facing high inflation — fueled by soaring energy prices as a result of Trump’s war on Iran — and a labor market showing signs of weakness.

The US central bank has the dual mandate of keeping inflation at its long-term target of two percent and maintaining maximum employment.

US consumer inflation came in at 3.8 percent in April, a three-year high, with American households suffering from price increases expected in the post-pandemic years.

At the Fed’s meeting last month, most policymakers indicated that a rate hike may be necessary if inflation remains above the Fed’s long-term target.

Warsh has argued that the productivity gains from artificial intelligence-led innovation will grow the US economy faster without adding to inflation.

The US unemployment rate has remained relatively stable at around 4.3 percent for the past year. But job growth — often used as a proxy for economic activity — fluctuates wildly between expansions and contractions from month to month.

That situation — high inflation and inconsistent job growth — has left the Fed in a potentially sticky situation of choosing between its mandates.

“Kevin Warsh won’t be able to cut the rates the president wants,” said David Wessel, a senior fellow at the Brookings Institution.

“At some point, the president might get impatient and start attacking Mr. Warsh like he did Jerome Powell.”

Warsh is “at a time of disruption and rebalancing of the president’s overall authority,” said Katherine Judge, a Columbia law professor whose research focuses on central banking.

Potentially adding to Warsh’s challenges will be the fact that his predecessor Powell has chosen to remain on the board as a member — an unusual but not unprecedented move for an outgoing chair.

Powell cited threats to the Fed’s independence as the reason for his decision.

On Friday, White House economic adviser Kevin Hassett said he hoped Powell would “step aside” soon so that Warsh could “take full and easy control of the Fed.”

Fed Governor Lisa Cook’s challenge to her dismissal is pending before the Supreme Court.