Federal Reserve Chair Jerome Powell was finally confirmed Thursday to a second term after a three-month delay. He’s led the central bank since 2018, after then-President Donald Trump nominated him to the position. President Joe Biden renominated him last year but the Senate dragged on the confirmation process as inflation reached its highest level in 40 years under Powell’s watch.
Powell had ushered the country through one of its darkest moments in history: the onset of the COVID-19 pandemic. Over the course of one month, global markets crashed about 34%.
The Federal Reserve initiated an historic response, cutting interest rates to near zero while initially buying up $2.3 trillion in bonds to stimulate lending. Powell and the Fed continued asset purchases over the next two years to stabilize the economy.
“We’re trying to get help quickly to the economy as it’s needed and I worry in hindsight we’ll see that we could have done things differently,” Powell said in an April 2020 interview. “But one thing I don’t worry about is inflation right now.”
Powell quickly steered the markets through a dramatic recovery and gained himself a new online reputation as “J-Pow,” becoming a darling among meme investors who credited his easy money policies with helping to keep the markets zooming higher.
But when consumer prices also kept surging higher and higher, month after month, Powell drew ire from all directions for repeatedly calling inflation levels “transitory.”
The country ended 2021 with inflation reaching 7% over the course of 12 months, the highest it’s been since 1982.
“The characterization of inflation as transitory is probably the worst inflation call in the history of the Federal Reserve,” Allianz Chief Economic Advisor Mohamed El-Erian said in December 2021.
The Fed Chair finally admitted at a November 2021 Senate Banking Committee hearing that it was time to reconsider his language.
“I think it’s time to probably retire that word and tell people more clearly what we mean,” Powell said.
Many criticized Powell for not acting sooner to tackle inflation, instead keeping interest rates low and asset purchases flowing at full speed when the economy showed large strides toward recovery.
“I’m concerned that the Fed missed the boat on addressing inflation sooner, a lot of us are, and as a result of that the Fed under your leadership has lost a lot of credibility,” Sen. Richard Shelby (R-AL) told Powell during his confirmation hearing with the Senate banking committee January 11.
A Republican, Powell has also drawn criticism from some on the left. Sen. Elizabeth Warren (D-MA) was the only member of the Senate banking committee to oppose his confirmation in 2018.
“You have acted to make our banking system less safe and that makes you a dangerous man to head up the Fed, and it’s why I will oppose your renomination,” Warren said in a September 2021 Senate hearing.
Despite recent challenges pivoting policy following a once-in-a-lifetime pandemic, Powell has broad bipartisan support on Capitol Hill and on Wall Street. Markets reacted favorably when Biden renominated him to be chief of the nation’s monetary policy.
In 2018, he was confirmed to the post by a vote of 84-13, and Thursday’s vote for a second term was 80-19.