US Federal Reserve names Jerome Powell interim chief amid leadership transition: ‘Action consistent with past practice’

Jerome Powell will serve as interim chair of the US Federal Reserve's Board of Governors until his successor, Kevin Warsh, is formally sworn in, they announced on Friday, local time.

Powell’s four-year term as chair concludes on 15 May. Although the US Senate has already confirmed, Warsh will assume office as the next Fed chief only after taking the official oath.

“This temporary action to name the incumbent as chair pro tempore is consistent with past practice during similar transitions between chairs,” the Fed said.

Powell serves as interim chair

The Fed board voted 5-1 in favour of Powell serving as the interim chair, with Fed Governor Stephen Miran voting against the action and Vice Chair for Supervision Michelle Bowman abstaining.

In a joint statement, Bowman and Miran said they supported Powell’s temporary designation, but said it should only be for a limited time.

“Given that we have a confirmed nominee who will soon be sworn in, in our view, the election of a chair pro tempore should be limited to a finite time period of at least a week (but we would support a period up to a month to allow for possible delay),” they said.

When will Kevin Warsh take charge?

US President Donald Trump must sign Kevin Warsh’s official commission before he assumes his new role. A Fed spokesperson declined to comment to Bloomberg on when Warsh may be sworn in.

The incoming Fed chief has pledged to divest sizable financial assets before taking office.

What happens if Warsh isn't sworn in within the interim chair's term?

If the incoming Fed chair — Kevin Warsh — isn’t sworn in during the time Powell is serving as the interim chair's term, Bowman and Miran said, the temporary designation should be subject to renewal by another vote of the Fed board, "or potential presidential action.”

They said they discussed the matter with the Fed’s general counsel. “Given that we do not support an unlimited timeframe for temporary chair designation, we cannot support this action,” they said.

Who is Kevin Warsh?

Kevin Warsh isn't new to the US central bank — he was previously sworn in as a member of the Board of Governors of the Federal Reserve System in February 2006 and left the Board in March 2011.

He served a five-year term, representing the Board at the G20 and engaging with both emerging and advanced economies in Asia. He also oversaw administrative responsibilities at the Board, including operations, personnel, and financial management.

During this period, he delivered several notable speeches on the financial crisis of 2007–09, including “The End of History?”, “The Federal Funds Rate in Extraordinary Times,” and “Rejecting the Requiem.”

According to a CNBC report, Warsh will be the wealthiest Fed chair ever, with holdings worth well over $100 million. As Fed chair, he will be required to divest many of his investments under a strict new policy introduced following disclosures of questionable trading practices among senior officials.