Jerome Powell succeeds Janet Yellen, who served for 14 years in Fed, last four as president. The only woman to serve as the head of the USA central bank described her work at the Fed as "the core of my existence".
Powell took the oath of office one day after his 65th birthday from Randal Quarles, the Fed's vice chairman for supervision, in a ceremony that was attended by Fed staff and Fed board member Lael Brainard.
Outgoing Federal Reserve chair Janet Yellen said United States stocks and commercial real estate prices are elevated but stopped short of saying those markets are in a bubble.
"We want regulations to be the most intense and most stringent for the very largest, most complex institutions and decrease in intensity, stringency as we move down" to regional and community banks, Powell said in the hearing, before the Senate Banking Committee. "My colleagues and I will remain vigilant, and we are prepared to respond to evolving risks".
Powell has said that the Fed would make policies that are efficient as well as effective. He brings a background in financial markets, a contrast with Ms Yellen and her predecessor, Ben S Bernanke.More news: Julian Assange loses challenge to United Kingdom arrest warrant
The fear is that monetary policy can now be influenced by five related factors, which can lead Powell to be more aggressive with rising rates: impact of fiscal stimulus on growth, increase in public deficit, rising wages for a job market in full employment, increasing inflationary pressure and market level.
But Yellen said she supported the choice of Powell as her successor. On Monday, she joined the Brookings Institution think tank as a distinguished fellow in residence in the economic studies program.
"I made it clear that I would be willing to serve, so yes, I do feel a sense of disappointment" about not being renominated, Yellen said.
"If the economy broadly behaves, I don't think it'll be of great effect", he said.