By Mari Hansen On April 29, the Eccles Building was quieter than usual—the kind of place where everyone is aware that something is coming to an end. Technically, reporters had come for the rate decision. The rate decision didn’t really matter to anyone. They had come to witness the 73-year-old, bespectacled, and slightly exhausted Jerome Powell deliver what most believed to be his farewell as the world’s most powerful central banker. He said something measured about energy prices, kept rates parked between 3.50% and 3.75%, and the moment went by without incident. He always did things that way. He simply declined to take part in the drama that was taking place all around him.
In retrospect, it’s difficult to ignore how peculiar his arrival appears. Eight years ago, when Powell took office, concerns were raised about low rates, low inflation, and a lack of employment opportunities for Americans. essentially the opposite issue of everything that came after. Today’s prices are about 27% higher than they were prior to the pandemic. The cost of groceries has increased by roughly 30%. That number is still shocking for a nation that hasn’t experienced true inflation in decades, and you can sense it in the way people discuss rent, used cars, and the price of a typical Tuesday.
This was not the man he was meant to be. Powell is not a trained economist; instead, he is a lawyer who worked in finance for a while and, as a student, busked around Europe with a guitar—a fact that he allegedly boasted about at Fed holiday parties. That’s telling in some way. The models belonged to the economists in his immediate vicinity. He was wise and had the temperament to withstand blows without showing signs of bleeding.
The assaults began. He was praised by President Trump when he nominated him in 2018, but things quickly soured, and by his second term, he was publicly referred to as a “numbskull” and worse. The majority of officials in that role give up or run away. Powell didn’t either. His actions in January, when he resisted an unprecedented Justice Department investigation connected, of all things, to the renovation of the Fed’s headquarters, will probably define him more than any rate change. He turned into one of the few individuals in Washington who refused to blink.
He would probably acknowledge that the record is not spotless. “Transitory” was the word that plagued him; most economists at the time wagered that post-pandemic inflation was a supply-chain glitch rather than a structural issue. Up until March 2022, when prices had already skyrocketed above 8%, the Fed kept rates close to zero. The central bank misread the tea leaves, according to critics like Mickey Levy at Hoover, while $5 trillion in government expenditures fueled the flames. That is a fair case. The counterargument is that no one, anywhere, had a plan for closing and reopening a global economy.
And then the part that hardly anyone had anticipated. Instead of the recession that everyone had predicted, unemployment dropped to a half-century low and inflation eased as the Fed raised rates to a two-decade high. a gentle landing. For years, economists had maintained that it was impossible to do so without breaking something. To be honest, it seemed a little unlikely that it would actually occur—like witnessing someone parallel park a freight train.
The conclusion he selected is what most impresses me. As soon as the gavel passed, all but one of the Fed chairs left. Powell isn’t. Until Kevin Warsh is confirmed, he will continue to serve as governor and “pro tempore” chair because he believes the institution is still “at risk.” That might be institutional conceit. It appears more likely that it is exactly what it appears to be: a man who determined that the place’s independence was more important than the honor of a tidy departure. It’s currently unclear if Warsh will maintain that position under duress. The traders refer to him as JPow, but he isn’t quite riding into the sunset. He is observing the road while he lingers at the gate.