Powell was on the Fed board during Obama’s second term, when the Fed maintained near-0% interest rates and deployed quantitative easing following the crash. Though the central bank is supposed to operate independently of the White House, Trump has moved to expand his presidential power over independent agencies. After the shock of the COVID-19 crisis, the stock market and housing market boomed in 2020, though some observers were critical of Powell’s decisions.
Jerome Powell (born February 4, 1953, Washington, D.C., U.S.) is the chair of the Board of Governors of the Federal Reserve System (“the Fed”), the central bank of the United States. The New York Times called him “Washington’s Best-Liked Man” and “a popular Main Street champion,” and Bloomberg News dubbed him “Wall Street’s Head of State.” Some liberal Democrats, however, have sharply criticized his policies. Speaking at a baccalaureate service ahead of Tuesday’s commencement, Powell, who noted he graduated from Princeton 50 years ago, specifically defended the central bank’s decision to cut its key interest rate to nearly zero in response to the pandemic. It also launched an asset-purchase program that involved buying trillions of dollars of Treasury bonds and mortgage-backed securities, intended to keep longer-term interest rates low.
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Powell later admitted that the presentation was rife with inaccuracies and twisted intelligence provided by others in the Bush administration. He later called his UN speech shooting star candlestick a “blot” that he regretted would forever be on his record. Powell’s efforts during the Gulf War also earned him further military awards, including a Congressional Gold Medal and a Presidential Medal of Freedom.
“The Federal Reserve is always creative about helping Wall Street and corporations during crises, but workers get left behind,” said Senator Sherrod Brown, then the top Democrat on the Senate Banking Committee. Economists labeled the situation a K-shaped recovery, wherein one segment of the economy improves while another declines (represented by the rising and declining arms of the letter K). When Powell became head of the Fed in 2018, he was the richest Fed chair since the 1940s, with a net worth between $19.7 million and $55 million. He was expected to maintain the policies of his predecessor, Janet Yellen, including raising interest rates. Under Yellen, the Fed raised rates five times from the near-zero rates put in place after the 2007–08 financial crisis.
In a speech for Princeton’s Baccalaureate service for the class of 2025, Powell, who graduated from the school in 1975, spoke about the biggest challenge he’s experienced during his time at the Fed — responding to the crisis fueled by the COVID pandemic. Powell has acknowledged that the Fed could have moved quicker to raise interest rates once inflation began to rise in 2021. The Fed does not issue debt, but Warsh and other Fed critics argue that its purchase of Treasury bonds enabled to federal government to borrow and spend more. “Each time the Fed jumps into action, the more it expands its size and scope,” Warsh said in a speech on the sidelines of the International Monetary Fund’s spring meetings. More institutional lines are crossed and the Fed is compelled to act even more aggressively the next time.“ Powell and the central bank have been subject to extensive criticism in recent weeks by President Donald Trump and a potential successor, former Fed governor Kevin Warsh.
Alongside his political career, Powell continued to rise in the military ranks, serving as Brigadier General in 1979 and major general in 1983, before eventually becoming a 4-star general, the most how to start forex in 2021 senior command ranking in the armed services. After growing up in a Jamaican immigrant family in Harlem, Powell led a celebrated career that saw him rise from modest means up the military ranks. He served as a soldier in the Vietnam War and went on to become Chairman of the Joint Chiefs of Staff. To share with you what the United States knows about Iraq’s weapons of mass destruction …
It remains unclear whether the President has the legal authority to remove Powell. Under current law, the executive branch must provide a non-political justification to prove that the Fed chair is no longer capable of fulfilling the role. Fed policymakers manage uncertainty by trying to predict the different ways the economy could evolve in the coming months, pepperstone forex based on economic models using a vast array of data. Bush decided to go to war and, in a crucial moment, Powell agreed to support the president.
Chair of the Federal Reserve
By understanding the Fed’s dual mandate to promote employment and stable prices, you can better understand the central bank’s impact on your wallet. While Congressional allies have since launched task forces to review the Fed, central bank independence is enshrined in the Federal Reserve Act of 1913, which insulates rate decisions from electoral pressures. Under this framework, the chair and Fed governors are to base their policy decisions on objective data, such as inflation rates, unemployment figures, and gross domestic product growth, rather than political calendars or fiery rhetoric. As President Donald Trump escalated attacks during his second administration on U.S. Federal Reserve Chair Jerome H. Powell—calling him a „major loser“ and suggesting his „termination cannot come fast enough“—the Fed chair’s role has become as politically charged as it is financially consequential for everyday Americans. The high-stakes name-calling rattled financial markets, with Treasury yields spiking amid growing concerns about central bank independence.
While on his second Vietnam tour of duty from 1968 to 1969, the 31-year-old Army major was given the assignment of investigating the My Lai massacre. Powell’s report seemed to refute the allegations of wrongdoing and stated, „Relations between American soldiers and the Vietnamese people are excellent.“ Also during this tour in Vietnam, Powell was injured in a helicopter crash. Despite his injury, he managed to rescue his comrades from the burning helicopter, for which he was awarded the Soldier’s Medal. In all, Powell has received 11 military decorations, including the Legion of Merit. The Fed’s mandate requires balancing the need to maintain price stability by controlling inflation and keeping unemployment low. Premature rate cuts could fuel asset bubbles while entrenching higher inflation, ultimately forcing more aggressive Federal Reserve rate hikes later, potentially triggering deeper recessions and greater job losses.
In 2000, President George W. Bush appointed Powell secretary of state, and Powell was unanimously confirmed by the U.S. At that time, this was the highest rank in civilian government ever held by an African American. During his tenure, Powell came under fire for his role in building the case for the 2003 invasion of Iraq. Initially, Powell had serious misgivings about President Bush’s plan to invade Iraq and overthrow Saddam Hussein.
- Under Yellen, the Fed raised rates five times from the near-zero rates put in place after the 2007–08 financial crisis.
- As President Donald Trump escalated attacks during his second administration on U.S.
- The Chair reports to Congress and is the public face of the Board of Governors, which gives people the perception that it is a politically powerful position.
- America’s souring economic mood comes at a time when the US economy has shown early signs of slowing, but also of stubbornly elevated inflation — a toxic combination sometimes referred to as stagflation.
- In 1972 Powell launched his political career when he earned a prestigious White House Fellowship under the Nixon administration.
Early Life and Education
Despite some criticism, Powell’s commitment to the Fed’s dual mandate of stable prices and full employment remains unwavering. His legacy will undoubtedly shape the future of American finance, reflecting his profound impact on economic policy and financial markets. Powell’s story is a testament to his resilience, expertise, and dedication to the nation’s economic well-being. Despite political pressures, the chair’s legal independence serves as a bedrock for long-term economic stability and objective monetary policy.
In a rare moment of candor at the Economic Club of Chicago yesterday (April 16), Federal Reserve Chair Jerome Powell gave a glimpse into his daily routine—and addressed the political pressures threatening the Fed’s independence. In 2006, he was a speaker at a special series called Get Motivated, along with former New York Mayor Rudolph Giuliani. For the remainder of Bush’s first term, Powell tried to establish an international coalition to assist in the rebuilding of Iraq. In September 2004, he testified before Congress that the intelligence sources he used in his February presentation to the United Nations were „wrong“ and it was unlikely that Saddam had any stockpiles of weapons of mass destruction. Powell advised the committee of the necessity to reform the intelligence community in order to improve its gathering and analysis. In 2004, after acknowledging it was unlikely that Iraq possessed stockpiles of weapons of mass destruction, Powell announced his resignation as secretary of state.
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It was discovered that the administration had arranged for covert and illegal shipments of U.S. weapons to Iran in exchange for the release of hostages. Proceeds from the sale of the weapons would go to support the counter-insurgency movement in Nicaragua, which was aimed at toppling the Sandinistas. Powell was asked to testify before Congress about the incident, but he was not implicated in any wrongdoing. Powell earned an MBA at George Washington University, in Washington, D.C., and won a White House fellowship in 1972. He was assigned to the Office of Management and Budget during the Nixon administration and made a lasting impression on Caspar Weinberger and Frank Carlucci. Both men would consult Powell for advice when they served as secretary of defense and national security adviser, respectively, in the Reagan administration.
A single 0.50% rate cut could save a homeowner with a $400,000 mortgage about $104 per month, or more than $1,200 per year, on a 30-year mortgage compared with current rates. Visit our website terms of use and permissions pages at for further information. NPR’s A Martinez speaks with Sarah Binder, a professor at George Washington University, about Federal Reserve Chairman Jerome Powell’s approach to economic policy. He went on to vote for Hillary Clinton in 2016 over Donald Trump and again snubbed Trump in 2020 during the President’s second campaign, announcing his support for President Joe Biden. The retired general later delivered an address in support of Biden during the Democratic National Convention.
In his Sunday speech, he defended American universities, which have come under sharp attacks from the Trump administration as research grants and other funding have been cut for several Ivy League universities, including Princeton. Trump has subjected Powell to a stream of attacks for several months because the Fed has kept its key rate unchanged this year, after cutting it three times at the end of 2024. Trump has said there is “no inflation” so the Fed should reduce borrowing costs.
- Despite political pressures, the chair’s legal independence serves as a bedrock for long-term economic stability and objective monetary policy.
- Powell and his wife, Alma, now co-chair the organization, which has a presence in more than 500 communities in all 50 states.
- Instead, he returned to the White House as President George W. Bush’s secretary of state in 2001, becoming the first black person in US history to fill that role.
- Powell was asked to testify before Congress about the incident, but he was not implicated in any wrongdoing.
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Powell maintained that the rate hikes were necessary to prevent inflation and ensure long-term economic stability, and said he would not resign if asked. Powell has repeatedly faced Trump’s wrath over the Fed’s interest rates decisions. Earlier this month, Trump called Powell a “FOOL, who doesn’t have a clue” after the central bank decided to leave rates unchanged, citing concerns about inflation and unemployment figures potentially rising.
He graduated from Princeton University and Georgetown University Law Center, where he was editor-in-chief of the Georgetown Law Journal. Powell’s journey includes roles at Dillon, Read & Co., The Carlyle Group, and the U.S. Appointed to the Federal Reserve Board by President Obama in 2012, he became Chairman in 2018 under President Trump and was renominated by President Biden in 2022.