Jerome Powell officially took over the Federal Reserve today: facing internal and external challenges, this new helmsman will face a series of tests as he steers the ship.

Kevin Wash will be sworn in as Chairman of the Federal Reserve on Friday. His widespread criticism of current Federal Reserve officials, his strategy plans for interest rate cuts, and his close relationship with President Trump have propelled him above other competitors and successfully put him in charge of the Federal Reserve. Currently, monetary policy and the U.S. economy are at a critical moment. An ongoing wave of artificial intelligence technology is reshaping the economy, Federal Reserve officials say that this reshaping could have far-reaching implications for labor, businesses, and consumers, but Wash and his colleagues may find it difficult to assess in real time. At the same time, inflation is already high, and with the economy facing multiple shocks, inflation could further increase. These shocks include: a potential war between the U.S. and Iran driving oil prices above $100 per barrel, high import tariffs, and increasing utility and other costs due to the widespread adoption of artificial intelligence. In a public "interview" process that lasted a year and started with several top candidates, 56-year-old Wash won the support of Trump, with one of the unsuccessful candidates set to sit alongside him on the Federal Reserve Board. Trump plans to host Wash's swearing-in ceremony at the White House at 11 a.m. Eastern time on Friday. Wash has ambitious reform goals for the Federal Reserve. He believes that the Federal Reserve lost its way as early as 2011 when he resigned from the board in opposition to the Fed's bond-buying program. However, his first few months in office may be consumed by a more urgent dilemma: whether to raise rates to prevent inflation from moving further away from the Fed's 2% target, or risk damaging his reputation as an "inflation fighter" from the start - a quality that will ultimately measure his success or failure. "Inflation is a choice for the Fed," Wash said during his Senate confirmation hearing. The Fed's control over short-term interest rates is a lever that can be used to stimulate or suppress consumption, and it strives to keep inflation at the 2% target set by the Fed. The Fed has not met this target for over five years, currently exceeding it by over one percentage point. However, lowering inflation involves difficult choices, sometimes conflicting with the policies and goals of the Trump administration, and at times conflicting with the Fed's other goal of maximizing employment. From the moment Wash was sworn in as the 11th Chairman of the Federal Reserve, he must remain vigilant - global bond markets have started to push up long-term bond yields, indicating increasing concerns about inflation; his colleagues have already formed expectations that may require raising rates; and Trump has viewed rate hikes as political attacks on his economic plans and has criticized former Fed Chairman Powell for not reducing borrowing costs. Wash's statements and his response to the current controversies facing the Fed (including the Supreme Court's upcoming ruling on Trump's attempts to dismiss board member Lisa Cook, which have yet to be successful), will be closely watched and closely compared to Powell's firm defense of the Fed's independence. The debate over policy has reached a climax. Federal Reserve Governor Christopher Wall, appointed by Trump and involved in the chairman interview process, gave a speech on his policy views before Wash's swearing-in ceremony on Friday. Wall is a seasoned Fed official who has become a central policy voice since his appointment as a board member. With increasing concerns about inflation, his attitude towards rate cuts has become increasingly cautious. If his stance further leans towards hawkish, it could reshape market views, suggesting that the Fed may need to raise rates in the coming months, or at best, maintain the current rate level for a longer period. Following the appointment of Powell as chairman in 2018 (rather than Wash), Trump lost favor with Powell in the following months. He called Powell "too slow" because Powell did not cut rates this year even though there is pressure from tariffs and energy costs to keep inflation above the Fed target. However, in recent comments, he seemed to give Wash a grace period - and so far has not given him a nickname. The next Fed meeting is scheduled for June 16-17, when policymakers will vote on rates and submit new economic forecasts. One of Wash's initial substantive decisions will be whether to submit a "dot plot" on his view of where rates will be by the end of this year, revealing whether his views differ significantly from those of his colleagues, whom he criticized for "groupthink", or if he will be a "dissenter" whose views may further confuse the market that has already pushed up U.S. long-term rates. The Fed's monetary policy decisions affect a range of consumer-focused and politically sensitive rates, such as mortgage rates; and their "choice" on inflation is made against a backdrop of consumer price shocks such as gas prices of $4.50 per gallon, which are beyond the direct control of the Fed. These tangible reminders indicate a lack of progress by Trump on his key presidential promise to "end inflation from day one and make America affordable again", a promise that now rests in Wash's hands to fulfill.