Powell Bids Farewell to the Federal Reserve on May 15: Misjudged Inflation, Failed Rate Cuts, Eight Years of Achievements and Failures Left for Future Generations to Judge

Federal Reserve Chair Powell officially steps down this Friday. An eight-year term, with merits and faults, it’s too early to evaluate—keyly depending on whether inflation can stabilize and whether the central bank’s independence can be maintained.

Two major “hard flaws” cannot be avoided:

· 2021’s huge mistake: claiming high inflation was a “temporary phenomenon,” delaying rate hikes until March 2022, resulting in the worst inflation in 40 years. He later admitted, “We could have acted sooner.”
· Ongoing controversy over rate cuts: in summer 2024, he announced a high-profile victory over inflation and began cutting rates. However, inflation rebounded just after dropping to 2.3%, and has now exceeded the target for six consecutive years. Industry critics say: unnecessary multiple rate cuts in later stages, and possibly forced to raise rates again in the future.

Central bank independence under siege

Populism rises, political interference intensifies. Successor Kevin Woeh faces a critical test: can the Fed still stand tall?
Historical evaluation “lags behind”

Like Greenspan, who was revered during his tenure but later scrutinized for regulatory failures after leaving office. Powell’s ultimate legacy depends on whether inflation can return to 2% in the next few years, and whether his successor can withstand political pressure.
In a word: Powell is gone, but the pitfalls he left behind have yet to be filled.