{"id":29105,"date":"2026-05-15T17:10:21","date_gmt":"2026-05-15T17:10:21","guid":{"rendered":"https:\/\/www.europesays.com\/news\/29105\/"},"modified":"2026-05-15T17:10:21","modified_gmt":"2026-05-15T17:10:21","slug":"a-look-at-jerome-powells-legacy-as-federal-reserve-chair","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/news\/29105\/","title":{"rendered":"A look at Jerome Powell’s legacy as Federal Reserve chair"},"content":{"rendered":"

WASHINGTON (AP) \u2014 When Jerome Powell was sworn in<\/a> as chair of the Federal Reserve eight years ago, economists worried that inflation and interest rates were too low and that too few Americans had jobs<\/a>. <\/p>\n

Now, as Powell steps down from the post after eight tumultuous years, the U.S. economy is transformed: Inflation soared<\/a> after the pandemic and has remained above the Fed\u2019s 2% target for more than five years, angering voters<\/a> and making rents, cars, and groceries<\/a> harder to afford. The Fed\u2019s key short-term rate rose to a two-decade high in 2023, even as unemployment fell to a half-century low<\/a>. <\/p>\n

Along the way, Powell shrugged off relentless personal attacks from President Donald Trump that began just months<\/a> after his appointment. But in January, he pushed back against an unprecedented legal investigation<\/a> by the Justice Department, becoming one of the few top officials in Washington to stand up to the Trump White House. <\/p>\n

Powell said he will continue serving on the governing board<\/a> until he is confident the Fed\u2019s independence is truly restored. His success at protecting the central bank from day-to-day politics will be a key part of his legacy. <\/p>\n

\u201cIt is not an unblemished record, but in an extremely challenging context, he\u2019s performed exceedingly well,\u201d said David Wilcox, a senior fellow at the Peterson Institute for International Economics and director of research at Bloomberg Economics. \u201cAnd my overall assessment is that the country has been lucky indeed to have him as chair.\u201d<\/p>\n

Unlike many of his predecessors, Powell, 73, is not a trained economist, but a lawyer who also worked in finance before joining the Fed\u2019s board of governors in 2012. Unassuming in public and private, Powell often introduces himself as \u201cJay\u201d and would display his guitar-playing skills, honed as a student busking through Europe, at the Fed\u2019s holiday parties. <\/p>\n

\u2018Transitory\u2019 inflation proved persistent<\/p>\n

An inescapable part of Powell\u2019s legacy will be the post-pandemic inflation surge, when consumer prices rose by a four-decade high of 9.1% in June 2022<\/a>. <\/p>\n

Overall prices are now 27% higher than just before the pandemic six years ago, a staggering change for a country that had experienced little inflation for generations. Prices rose just 10% in the six years before the pandemic. Groceries are 30% more expensive than six years ago, after they rose just 3.6% in the six years preceding COVID. <\/p>\n

Powell and other Fed officials \u2014 and indeed most economists \u2014 initially said the inflationary surge was \u201ctransitory,\u201d a result of supply chain snarls<\/a> brought about by the pandemic, as COVID shut down factories and slowed ports around the world. <\/p>\n

Their immediate priority was supporting the economy in a crisis. <\/p>\n

In two moves in March 2020, they slashed their benchmark interest rate by 1.5 percentage points to near zero. The Fed also bought large amounts of Treasury debt and government-backed mortgage securities to reduce longer-term interest rates and took other steps to pour money into the financial system to keep credit markets functioning during pandemic chaos. <\/p>\n

In April 2020, Powell said that the Fed would \u201ccontinue to use these powers forcefully, proactively, and aggressively until we are confident that we are solidly on the road to recovery.\u2019’<\/p>\n

Even as inflation zoomed past the Fed\u2019s 2% target in 2021, the central bank kept its key interest rate near zero until March 2022, when inflation hit 6.9%, according to the Fed\u2019s preferred measure. <\/p>\n

The Fed\u2019s delay in raising rates was largely informed by a traditional economic view that inflation, stemming from a supply shock, would be temporary and if a central bank cranked up borrowing costs to fight it, the higher rates would just harm the economy and lift unemployment even as the supply crunch faded. <\/p>\n

Misreading tea leaves<\/p>\n

Meanwhile, the Trump and Biden administrations pumped about $5 trillion in government spending into the economy, in the form of multiple stimulus checks, support for small businesses, and other aid. The flow of dollars fueled a spending spike just as supply chains were unable to deliver<\/a> on the demand. <\/p>\n

By keeping its key rate near zero for so long, Powell\u2019s critics charge, the Fed contributed to that excess spending and worsened inflation.<\/p>\n

\u201cEven though there was all the evidence there in the data that aggregate demand was going through the roof, they still said it was a transitory supply shock,\u201d said Mickey Levy, a former top economist at Bank of America and a visiting fellow at the Hoover Institution. \u201cThe Fed contributed to that inflation and completely misread the tea leaves.\u201d<\/p>\n

As inflation began to spread into items such as apartment rents and surveys showed Americans increasingly worried it would last, Powell pivoted and oversaw the sharpest increase in interest rates since the early 1980s to combat the price spike. <\/p>\n

Still, many leading economists, including former Treasury Secretary Larry Summers, worried that defeating inflation would require a recession<\/a> and a sharp increase in unemployment. Instead, inflation dropped to 2.3% by September 2024, according to the Fed\u2019s preferred measure, nearly reaching its 2% target.<\/p>\n

By reducing inflation without a sharp economic downturn, Powell largely achieved an elusive \u201csoft landing.\u201d Inflation then moved higher<\/a> after Trump imposed sweeping tariffs last April. <\/p>\n

Focusing on unemployment<\/p>\n

Fighting inflation was a sharp shift for a Fed chair that began his term more focused on the Fed\u2019s mandate to pursue maximum employment. Before the pandemic, Powell often lauded the benefits of a strong job market for disadvantaged workers, winning plaudits<\/a> from many progressive economists. <\/p>\n

Yet some economists<\/a> argue the Fed\u2019s focus on employment contributed to its delayed response to post-COVID inflation. In an August 2021 speech, Powell said the then-elevated unemployment rate of 5.4% was a reason to avoid hiking rates too early. <\/p>\n

Still, many analysts defend Powell\u2019s support for the maximum employment mandate. Julia Coronado, president of MacroPolicy Perspectives and a former Fed economist, said Powell was right to keep rates low before the pandemic, even as unemployment steadily declined, because there were no signs inflation was worsening. <\/p>\n

\u201cIf you can actually push a little harder for a little longer with no consequences for inflation, then you should damn well do it,\u201d she said. \u201cHe was absolutely right about that. He\u2019s still right about that.\u201d<\/p>\n

For his part, Powell said in late April<\/a> that \u201coverweighting the employment market\u201d had nothing to do with the inflation spike. <\/p>\n

\u201cIt was a global shock that happened essentially very, very similarly all over the world,\u201d he said. <\/p>\n

Fighting for Fed independence<\/p>\n

Last July, in an image<\/a> that will likely prove the most enduring of his time as Fed chair, Powell and Trump stood before cameras in hard hats at the site of the Fed\u2019s extensive $2.5 billion building renovation, which Trump had criticized as excessive<\/a>. <\/p>\n

Trump claimed the project would cost even more — $3.1 billion \u2014 and showed Powell a paper listing the costs. Powell took out his reading glasses and corrected the president, on camera, by noting that he had included a third building that had already been renovated. <\/p>\n

It was emblematic of Powell\u2019s willingness to push back against Trump\u2019s unprecedented attacks. Economists have long supported an independent Fed because it allows the central bank to take difficult steps \u2014 such as sharply raising interest rates to combat inflation \u2014 that politicians often oppose because they can be painful. <\/p>\n

Powell benefited from strong relationship-building with Congress. Research by University of Maryland economist Thomas Drechsel has found that Powell met with senators more than twice as often as his two predecessors, with the meetings evenly split between both parties. <\/p>\n

During one visit, Powell even endeared himself<\/a> to North Carolina Republican Sen. Thom Tillis\u2019 dog, a move that paid huge dividends. Tillis essentially blocked Senate approval of Kevin Warsh<\/a>, Trump\u2019s pick to replace Powell, until the investigation of the building project was dropped. The Justice Department eventually gave up<\/a> on its probe.<\/p>\n

Even those who fault Powell on some policy decisions credit him for defending the Fed.<\/p>\n

\u201cThe big plus is the way he has protected central bank independence,\u201d said Don Kohn, a former vice chair of the Fed. \u201cThat is the most important thing for the future of the Federal Reserve and for protecting the public interest in having an independent central bank.\u201d<\/p>\n

Powell hasn\u2019t said when he may leave the Fed, though he could remain on the governing board until January 2028. <\/p>\n

\u201cYou want people to … set interest rates to benefit the general public,\u201d Powell said at his last news conference, \u201cand focus only on that and ignore political considerations. This isn\u2019t bipartisan, this is nonpartisan.\u201d<\/p>\n

____<\/p>\n

AP Economics Writer Paul Wiseman in Washington contributed to this story.<\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON (AP) \u2014 When Jerome Powell was sworn in as chair of the Federal Reserve eight years ago,…\n","protected":false},"author":2,"featured_media":29106,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[61,576,112,17743,1790,17739,38,1038,594,2240,50,8,2237,3912,17738,3914,2239,17742,17741,9,67,472,17740,7,54,100],"class_list":{"0":"post-29105","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-stories","8":"tag-ap-top-news","9":"tag-bank-of-america-corp","10":"tag-business","11":"tag-dave-wilcox","12":"tag-district-of-columbia","13":"tag-don-kohn","14":"tag-donald-trump","15":"tag-economic-indicators","16":"tag-economic-policy","17":"tag-federal-reserve-system","18":"tag-general-news","19":"tag-headlines","20":"tag-inflation","21":"tag-jerome-powell","22":"tag-julia-coronado","23":"tag-kevin-warsh","24":"tag-labor","25":"tag-lawrence-summers","26":"tag-mickey-levy","27":"tag-news","28":"tag-politics","29":"tag-thom-tillis","30":"tag-thomas-drechsel","31":"tag-top-stories","32":"tag-u-s-news","33":"tag-united-states-government"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@news\/116579704959276655","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/29105","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/comments?post=29105"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/posts\/29105\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media\/29106"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/media?parent=29105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/categories?post=29105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/news\/wp-json\/wp\/v2\/tags?post=29105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}