#WarshSwornInAsFedChair

17th Chairman Takes Office

A nearly 40-year-old convention was broken on May 22, 2026.

U.S. President-elect Trump personally presided over Kevin Walsh’s swearing-in ceremony at the White House at 11:00 a.m. Eastern Time, officially appointing him as the 17th Chair of the Federal Reserve. This is the first time since President Ronald Reagan’s swearing-in of Alan Greenspan in 1987 that a Fed chair has taken the oath of office at the White House.

🔹 The most divided confirmation vote—and an unprecedented “legacy”
Walsh’s path to the nomination was not smooth. On May 13, the Senate confirmed his appointment by a narrow margin of 54 votes in favor and 45 against, widely viewed as the most partisan split in modern history for the Fed chair position. He succeeded Jerome Powell, whose term ended on May 15, and will face immediate challenges. At the same time, Powell broke a 75-year-old Fed tradition by explicitly stating that he would remain as a governor until 2028—meaning that for every policy meeting going forward, Walsh will have a “former boss” seated at the table.

🔹 Passing on the inflation “hot potato”
As Walsh took over the Fed, U.S. inflation was once again starting to rise. In April, the Consumer Price Index (CPI) accelerated to 3.8%, reaching a three-year high, while the Producer Price Index (PPI) surged 6% year over year, the largest increase since the end of 2022. More troublingly, the Fed’s April meeting minutes showed that most officials believed that if inflation remained above the 2% target, “some policy tightening measures might be appropriate,” suggesting that rate hikes are back on the table.

🔹 Straddling political realities and economic theory
Walsh, who served as a Fed governor during the 2008 financial crisis, returns with an ambitious “institutional reform” agenda, including reducing the Fed’s massive balance sheet and reforming how decision-making is communicated. Even though Trump wants him to cut rates immediately, the market is telling a different story: the CME FedWatch tool shows the market is almost certain the Fed will hold steady in June, and even expects rate hikes next year. This puts him to the test in two ways—holding back political pressure from the White House to preserve Fed independence, while also dealing with sharp internal divisions within the Federal Open Market Committee (FOMC) between hawks and doves, and addressing geopolitical risks such as a surge in oil prices tied to the situation in Iran.

🔹 The market has entered “stress test” mode
Historical data shows that within 1, 3, and 6 months after a new Fed chair takes office, the S&P 500’s average maximum drawdowns were 5%, 12%, and 16%, respectively. The VIX volatility index often rises during leadership transitions, and the market’s repricing of the Fed’s policy path has only just begun. With the start of the Walsh era, markets need to adapt to a new normal in which the Fed may no longer provide “Fed put options.”

As Walsh is sworn in, the Powell era of “over-communication” is now a thing of the past, and the Fed has officially entered a new epoch full of uncertainty.

Everyone, do you think this new chair, burdened with the task of “reform,” will first bow to the market—or lean toward the White House?