Powell's farewell countdown: From "Atypical Chairman" to crisis "firefighter," leaving a dual legacy of high inflation and soft landing

BlockBeats News, May 9 — Powell will officially step down as Federal Reserve Chair on May 15. This “non-typical” central bank leader, who is not an economist by training, has experienced the pandemic shock, the worst inflation in 40 years, an aggressive rate hike cycle by the Fed, and political storms surrounding the independence of the central bank over the past eight years.

In the early part of his tenure, Powell continued the gradual rate hikes and balance sheet reduction path; after the outbreak of the pandemic in 2020, he led the rollout of a “zero interest rate + unlimited QE + emergency lending tools” combo, quickly stabilizing market liquidity, avoiding a deep recession in the U.S. economy, and driving a subsequent V-shaped recovery.

However, as the U.S. economy reopened and fiscal stimulus was released, Powell and the Fed once considered inflation to be “transitory,” which was seen as the biggest policy mistake of his tenure. In 2022, U.S. CPI soared to 9.1%, hitting a 40-year high. Since then, the Fed launched the most aggressive rate hike cycle since the 1980s, raising rates 11 times, bringing the federal funds rate to 5.25%-5.5%.

Although the tightening cycle initially sparked concerns about a recession, the U.S. ultimately managed to control inflation without a severe economic downturn, which was viewed as a “soft landing” by the outside world. Data shows that the U.S. CPI year-over-year increase has significantly retreated from its 2022 peak, while the labor market remains relatively resilient.

Apart from monetary policy, another core issue during Powell’s tenure is maintaining the independence of the Federal Reserve. He has faced long-term public pressure and rate cut demands from the Trump administration, and even faced a criminal investigation related to the Fed’s renovation project in 2026, which prompted rare joint statements of support from multiple central banks worldwide.