"The Powell Era" is Coming to an End: A Core Summary of Powell's Eight-Year Federal Reserve Tenure

From 2018 to 2026, Powell led the Federal Reserve, responding to multiple crises in succession over eight years, with policies marked by ups and downs and clear merits and demerits.

In the early part of his term, he addressed trade tensions by initially maintaining gradual rate hikes to strengthen the economy, then, as economic risks increased, he initiated preemptive rate cuts, while firmly maintaining the Fed's stance of not intervening in trade policies. In 2020, with the outbreak of the COVID-19 pandemic, the stock market repeatedly circuit-breakered and unemployment soared. He decisively launched zero interest rates, unlimited quantitative easing, and multiple emergency lending programs, doing everything to stabilize the markets and support the financial system, but also laying the groundwork for inflation risks.

In 2021-2022, U.S. inflation reached a 40-year high. Powell initially misjudged the "transient" nature of inflation, leading to policy delays, but quickly corrected course afterward, initiating the most aggressive rate hike cycle in four decades, pushing interest rates to a twenty-year high. In 2023, aggressive rate hikes triggered bank failures; he raised rates modestly to combat inflation while also launching financing plans to prevent the crisis from spreading.

Toward the end of his tenure, facing persistent inflation, economic slowdown, escalating geopolitical conflicts, and dual pressures from Trump’s strong push for rate cuts and challenges to the Fed’s independence, monetary policy fell into a state of hesitation and "stop-and-go" deliberation. Meanwhile, he firmly resisted political interference, upheld the independence of the central bank, and after his term ended, he remained as a Fed governor.

Overall, Powell responded decisively and effectively to crises, but his inflation misjudgment led to significant policy errors. He has always faced the difficult balancing act of stabilizing the economy, controlling inflation, and defending the Fed’s independence.