Eight years Powell bows out "See you next time"

“I won’t see you next time,” the term is ending, and the Powell era is entering its countdown.

On April 29, 2026, at the end of the Federal Reserve’s routine press conference, Chairman Jerome Powell, before stepping down from the podium, told the assembled reporters this seemingly casual yet profoundly meaningful remark—“Thank you all, see you next time no more.”

Then he left the podium, exited the venue, and concluded his final press conference as Fed Chair.

On May 15, 2026, Powell’s chairmanship will officially come to an end. On that day, his successor, Kevin Woeh, nominated by Trump, is expected to be confirmed by the Senate Banking Committee to take over this one of the most powerful monetary policy positions in the world.

Eight years, two terms, spanning two presidents, a once-in-a-century global pandemic, and the most severe inflation in the US in four decades. What Powell leaves behind is a tangled ledger of achievements and controversies—: under his leadership, the Federal Reserve successfully maintained employment, bringing the average monthly unemployment rate down to 4.6%, lower than predecessors Greenspan, Bernanke, and Yellen; but at the same time, his tenure saw an average inflation rate of 3.09%, far exceeding the Fed’s 2% policy target and well above the average during previous chairmen’s terms.

When reflecting on his policy legacy, Powell quotes Frank Sinatra’s famous saying, stating he has some regrets, but not many. Perhaps, this phrase is the most fitting footnote to these eight years.

An Atypical Central Bank Governor: From Princeton Humanities Student to Fed Leader

In November 2017, then-President Trump announced the nomination of Jerome Powell to succeed Janet Yellen as the 16th Chair of the Federal Reserve. The appointment immediately sparked a storm in academic circles.

The reason was simple: Powell is not an economist.

Over the past thirty years, starting with Greenspan in 1987, all Fed chairs held PhDs in economics and were top scholars in macroeconomics. Powell’s background, on this elite track, appeared particularly unconventional.

Powell graduated in 1975 from Princeton University with a Bachelor of Arts in Humanities, then entered Georgetown University Law Center, earning a Juris Doctor. His career began as an investment banker in New York, then he moved to the Treasury Department, serving as a Treasury official during the George H. W. Bush administration, handling domestic finance, debt, and tax policies.

From 1997 to 2005, he worked as a partner at the renowned Washington private equity firm Carlyle Group, and in 2008, he moved to the private equity firm Global Environment Fund as managing partner.

In 2011, then-President Obama nominated him to the Federal Reserve Board of Governors. This move was widely interpreted as a gesture of outreach to Republicans. In 2012, The Wall Street Journal disclosed that Powell’s personal assets ranged from $21.3 million to $72.2 million, making him the wealthiest member of the Fed Board at the time.

However, wealth accumulation on Wall Street could not compensate for the lack of an academic background in economics. Greg McBride, chief financial analyst at Bankrate.com, bluntly stated: “Jerome Powell does not have a PhD in economics, yet he is tasked with guiding the world’s largest economy. Appointing a non-economist to lead the Fed is a break from tradition.”

Critics’ words are even sharper. Josh Bivens, director of research at the Economic Policy Institute, called for retaining Yellen and pointed out: “It’s time for a true macroeconomist to take the helm, not someone who might be obedient to the Board.”

More commentary, citing G. William Miller as the last non-economist Fed chair, notes that Miller, during Carter’s administration, misjudged inflation and resigned after only 17 months, warning that history might repeat itself.

However, Aaron Klein, a senior economist at the Brookings Institution, holds a different view. He believes that Powell’s extensive practical experience in the Treasury and Fed makes him fully capable of the role. More importantly, his unconventional background might actually help the Fed break the long-standing ‘groupthink.’

“There’s no magic formula exclusive to PhDs in economics,” Klein said. “A leader with a different background could be an advantage—provided he knows when to set aside models and rely on intuition.”

This debate will be put to the most dramatic test over the next eight years.

Taking Over in 2018: A Bumpy Start

On February 5, 2018, Powell was sworn in, officially taking over the Fed from Yellen.

On the surface, he inherited a fairly good situation: inflation below the Fed’s 2% target, around 1.5%; unemployment at 4.1%, the lowest in 17 years; the economy regaining momentum after years of sluggishness; stock markets hitting record highs; and the Trump administration’s tax reform injecting fiscal stimulus.

However, beneath the surface, reefs were quietly gathering.

Veteran observer David Wessel pointed out at the time that what Yellen left Powell was not just a shiny record but a series of thorny problems: how to pace interest rate hikes before inflation pressures heat up; how to assess the impact of large-scale tax cuts on an already near-full-capacity economy; when and how to deploy unconventional monetary tools to respond to the next recession.

Other critics were more pessimistic. They believed that Yellen’s accommodative policies had lasted too long, allowing US stock valuations to soar to levels only seen three times in the past century, global government bond yields to plummet to historic lows, and systemic underestimation of credit risks—these would all become ticking time bombs for Powell.

Adding to the complexity were political variables. Just five months into Powell’s tenure, Trump publicly criticized him on CNBC: “I don’t like that we’re doing so much to the economy and then watching rates go up.”

Powell chose to ignore it. But this political tug-of-war was only just beginning.

In fall 2018, Powell’s remark that the Fed was “a long way from neutral” interest rates triggered sharp market swings. In December, his comment that balance sheet reduction was “on autopilot” sparked another market panic. Trump considered firing him.

These two episodes made Powell realize a crucial truth: as Fed Chair, every word has the power to shake markets.

Pandemic Shock: The “Overstep” in Crisis

If the initial policy adjustments after taking over were just a warm-up, spring 2020 was Powell’s real first major test.

In early 2020, the COVID-19 pandemic swept the globe, and the US economy plunged off a cliff within weeks. By April 2020, unemployment soared to 14.8%, the highest since modern statistics began in 1948, with millions losing jobs overnight.

Faced with this unprecedented crisis, Powell’s swift and aggressive response stunned Wall Street.

The Fed rapidly cut the benchmark rate to near zero, reactivated and expanded quantitative easing, purchasing trillions of dollars of bonds within weeks; simultaneously, Powell teamed up with the Treasury to launch a series of emergency credit facilities far beyond traditional central bank scope.

He later admitted these actions went far beyond conventional monetary policy.

“We crossed many red lines,” Powell said at Princeton in May 2020, “In such a situation, you do it first, then figure out how to fix it afterward.”

This gamble paid off. The US economy avoided a second Great Depression, with the labor market recovering from pandemic devastation in about two years—whereas the 2008 financial crisis took six years. Powell thus earned widespread praise, seen as a leader showing Volcker-like resolve in a crisis.

However, the phrase “fix it afterward” also planted the seeds for subsequent policy missteps.

Era of High Inflation: From “Transitory” Arrogance to “Volcker-Style” Iron Hand

The cost of pandemic rescue measures began to materialize in 2021.

Massive fiscal stimulus flooded markets, unleashing a demand surge, while global supply chains lagged behind expectations; at the same time, tight labor markets, rising energy, rent, and wage costs, and the subsequent Russia-Ukraine war, which drove energy prices sky-high, pushed US inflation toward uncontrollable levels.

In August 2021, faced with rising inflation, Powell made a decision at the annual Jackson Hole symposium that he would come to regret—calling current inflation “transitory,” believing supply chain disruptions would eventually subside and prices would normalize.

This judgment became his biggest policy mistake.

The reality proved otherwise: inflation did not “transiently” fade but accelerated. By February 2022, US core CPI inflation had surged to 6.4%, a 40-year high; by June, the headline CPI hit a peak of 9.1%. This was not only a misjudgment by the Fed but also a stain on Powell’s historical record.

At a congressional hearing, senators directly questioned: why did the Fed make such a serious misjudgment on inflation? Powell admitted that inflation in mid-2021 suddenly and rapidly accelerated beyond almost all mainstream macroeconomic forecasts; the speed of supply chain recovery was far slower than expected—an unprecedented situation. He acknowledged, “We should have acted earlier.”

Late correction, with unprecedented force.

In March 2022, the Fed officially began this rate-hiking cycle. Over the following year, Powell’s aggressive rate increases shocked markets—in less than two years, the benchmark rate was raised by over 500 basis points from near zero, a pace rarely seen in modern Fed history.

Contrasting sharply with the 2020 crisis response, this time Powell drew inspiration from his idol, Volcker. At the 2022 Jackson Hole symposium, he explicitly warned that bringing inflation “back” would cause “some pain” for employment and growth, and declared that he would “do whatever it takes” to maintain price stability, signaling a resolute stance on fighting inflation.

Critics argued this was a belated shift, and the Fed paid a heavy price—millions of American families suffered significant loss of purchasing power. But some economists defended Powell, attributing the inflation mainly to pandemic and geopolitical shocks on the supply side, not solely to monetary policy.

Most surprisingly, this unprecedented aggressive rate hike did not trigger the widespread recession many expected.

By the end of 2024, US GDP growth remained at 2.5%, and inflation fell sharply without pushing unemployment higher, with the labor market near full employment. The recession predicted by most economists never materialized.

Powell himself admitted at Harvard that achieving a “soft landing,” once thought nearly impossible, was one of his proudest achievements.

Legacy and Controversy: Independence as the Greatest Heritage

The ultimate judgment on Powell may not rest on any specific economic indicator but on a more fundamental issue: he preserved the Fed’s independence.

Trump, during his first term, frequently criticized Powell for not cutting rates and even considered firing him. After Trump returned to the White House in 2025, this political pressure escalated into direct conflict— the Justice Department was instructed to investigate the Fed over the cost overruns of the headquarters renovation, an almost unprecedented move in the Fed’s 112-year history.

Most analysts believe the real motive behind this investigation was to force the Fed to cut rates to serve Trump’s political agenda.

Faced with this unprecedented political pressure, Powell issued a video statement in January 2026, publicly countering, framing it as “the Fed setting rates based on what’s best for the public, not succumbing to the President’s preferences.” The video quickly circulated in financial circles, earning bipartisan support in Congress, allowing him to conclude his term on his own terms.

The last time a Fed chair faced such intense political pressure was over fifty years ago: Nixon pressured then-Chairman Arthur Burns to maintain loose monetary policy, leading to runaway inflation. Compared to that, Powell’s resilience and refusal to compromise place him much higher in history.

Full employment is another of Powell’s notable legacies.

During his tenure, the average monthly unemployment rate was 4.6%, lower than Greenspan’s 5.5%, Bernanke’s 7.3%, and Yellen’s 5.1%. Behind this figure lies real improvements in people’s lives: low unemployment disproportionately benefited the most vulnerable—between 2019 and 2024, the bottom 10% of earners saw a 15.3% increase in real wages; Black unemployment fell to 4.8% in 2023, a historic low.

Researcher Dean Baker wrote that Powell’s diligent pursuit of full employment allowed millions of workers who might otherwise have lost jobs to keep their jobs, and millions more to see wage increases they wouldn’t have otherwise.

Critics of Powell also have their reasons.

In regulation, the sudden collapse of Silicon Valley Bank in 2023 exposed lax oversight by the Fed. Baker bluntly stated: “He had serious regulatory failures that led to the need to rescue Silicon Valley Bank.”

On inflation, Powell’s average inflation rate during his tenure was 3.09%, exceeding the Fed’s 2% target by more than a percentage point, and higher than Greenspan’s 2.5%, Bernanke’s 1.84%, and Yellen’s 1.17%. At the end of his term, the Fed’s balance sheet remained around $6.7 trillion, more than doubling from when he took office, and his successor Kevin Woeh has already prioritized addressing this “legacy burden.”

Low unemployment and high inflation form the two sides of his complex legacy.

He summarized his work with a phrase: “We are building a dam, not preventing a hurricane.”

This is both a humble reflection on the Fed’s limits and his self-annotation of these eight years—not that he foresaw everything, nor that he was never wrong, but that in the most turbulent times, he tried to make the institution resilient enough not to be completely destroyed by political storms, pandemics, and floods of inflation.