WASHINGTON, May 18 (Reuters) - Kevin Warsh will be sworn in as U.S. Federal Reserve chief on Friday by President Donald Trump, a White House official said on Monday, capping off the process of installing the 56-year-old lawyer and financier at the helm of the central bank as it grapples with intensifying inflation that may make it hard to push through the interest-rate cuts Trump so deeply desires.

Warsh is succeeding Jerome Powell, whose eight-year run as Fed leader formally expired on Friday, although he plans to remain as a Board of Governors member until he is satisfied that a Trump administration criminal probe of him is fully wound down. Powell was sworn in as chair pro tempore on Friday to bridge the leadership gap until Warsh is formally installed.

The investigation into Powell centering on cost overruns for building renovations at the Fed's Washington headquarters complex became an obstacle for a time to Warsh's confirmation by the Senate. The probe was settled to the satisfaction of an objecting Republican senator, however, and the full Senate confirmed Warsh on an almost-party-line vote on May 13.

Warsh, who served as a Fed governor through the global financial crisis era, returns at a difficult moment for U.S. monetary policymaking. Annualized inflation is running well above the Fed's 2% target and likely to keep rising, largely because of policy choices by the president who gave him the job.

The tariffs Trump imposed through his first year in office pushed up prices for a broad range of imported goods, and then this year Trump's decision to go to war with Iran has triggered a global energy price shock that recent data show is driving up prices across a widening array of goods and services.

The tariffs' impact on its own had been a factor that a number of Fed policymakers, including Powell, had been willing to look past as a one-time price increase, not persistent inflation, and that could have allowed the central bank to resume interest-rate cuts that were put on hold early this year.

But the now-cascading effects of the Iran-war-induced energy price shock have deepened the inflation concerns of a growing number of the Fed policymakers Warsh must now lead and with whom he must now try to form a consensus over the direction of rate policy.

A run of hotter-than-expected readings of inflation caused upheaval in the bond market as last week ended. Yields on U.S. government bonds shot higher on Friday as investors repositioned for what they now see as sticky inflation and likely Fed rate hikes in response, starting perhaps as early as December.

Warsh's first rate-setting meeting is just weeks away in mid-June and he is likely to find himself confronted with a growing hawkish bloc of policymakers arguing for the Fed to shift its posture explicitly to guard against inflation. Interest-rate futures markets assign effectively zero probability to a change in the Fed's current policy rate, 3.50% to 3.75%, at the June meeting.