Jerome Powell speaking at Federal Reserve press conferencePowell Stays on Fed Board Despite Trump Pressure, Defying Precedent
Intra-Party Split Detected
Some Republicans like Thom Tillis initially opposed Warsh's confirmation over the Powell investigation, while most Republicans supported Trump's Fed nominee despite concerns about institutional independence
Left says
- •Powell demonstrated exceptional leadership by steering the economy through unprecedented crises including the pandemic, historic inflation, and relentless political attacks while maintaining the Fed's independence
- •His decision to remain on the Fed board represents a principled stand against Trump's weaponization of the Justice Department to intimidate central bank officials
- •Powell's aggressive response to inflation, though initially delayed, successfully brought prices down without triggering a recession - a remarkable achievement known as a 'soft landing'
- •Trump's attacks on Fed independence threaten a cornerstone institution of American economic stability and represent an authoritarian assault on democratic norms
Right says
- •Powell's delayed response to inflation allowed prices to surge to 40-year highs, imposing severe costs on American families through higher costs for housing, food, and basic necessities
- •His unprecedented decision to stay on the Fed board after his term expires breaks with established precedent and creates an unnecessary power struggle that could undermine effective monetary policy
- •The Fed's massive money printing during the pandemic contributed significantly to the inflation crisis that has persisted for over five years
- •Powell's public confrontation with the Trump administration represents inappropriate political grandstanding that politicizes what should be technocratic economic decisions
Common Take
High Consensus- Powell faced extraordinary challenges during his tenure including a global pandemic, historic inflation reaching 9%, and unprecedented political pressure
- Inflation has remained above the Fed's 2% target for five consecutive years, creating affordability concerns for American consumers
- The transition from Powell to Kevin Warsh occurs during a period of renewed inflationary pressures and economic uncertainty
- The Federal Reserve's independence from political interference is crucial for effective monetary policy and economic stability
The Arguments
Right argues
Powell's delayed response to inflation allowed prices to surge to 40-year highs, imposing severe financial hardship on American families through dramatically higher costs for housing, food, and basic necessities that persisted for over five years.
Left counters
Powell successfully engineered a 'soft landing' by bringing inflation down from 9% to 2.4% without triggering a recession, demonstrating that his measured approach ultimately protected both price stability and employment.
Left argues
Powell's decision to remain on the Fed board represents a principled defense of central bank independence against Trump's unprecedented weaponization of the Justice Department to intimidate Fed officials through criminal investigations.
Right counters
Breaking with established precedent by staying on the board creates an unnecessary power struggle and competing authority structure that could undermine effective monetary policy coordination under the new chair.
Right argues
The Fed's massive quantitative easing program during the pandemic essentially wrote Congress a blank check for excessive fiscal spending, contributing significantly to the inflation crisis that has plagued the economy for years.
Left counters
The Fed's aggressive intervention prevented a complete economic collapse during the pandemic shutdown, and the subsequent inflation was largely driven by global supply chain disruptions and energy price shocks beyond monetary policy control.
Left argues
Powell demonstrated exceptional crisis leadership by rapidly deploying emergency tools during the 2020 pandemic, preventing financial system collapse while maintaining the Fed's focus on maximum employment and price stability.
Right counters
Powell's public confrontation with the Trump administration represents inappropriate political grandstanding that politicizes what should be purely technocratic economic decisions made without regard to partisan considerations.
Right argues
Powell's 'transitory' inflation narrative in 2021 showed poor economic judgment, as the Fed continued pumping $120 billion monthly into an already overheating economy even as prices surged past 5%.
Left counters
The initial 'transitory' assessment was reasonable given unprecedented pandemic conditions, and once the Fed recognized the persistence of inflation, it acted decisively with historically aggressive rate hikes to restore price stability.
Challenge Questions
These questions target genuine internal contradictions — meant to provoke honest reflection.
Right asks Left
“If Powell's defense of Fed independence is so principled, why did he only take a public stand against political interference in his second encounter with Trump, but remained silent during years of verbal attacks and threats during Trump's first term?”
Left asks Right
“If Powell's delayed response to inflation was truly justified by unprecedented circumstances, how do you reconcile continuing massive monetary stimulus in 2021 when clear signs of economic overheating and labor market tightness were already evident?”
Outlier Report
Left Fringe
Progressive economists like Stephanie Kelton and some MMT advocates who argue Powell's anti-inflation measures were unnecessarily harsh and that the Fed should prioritize employment over price stability. Represents roughly 15% of the left.
Right Fringe
Hardline Trump supporters like Steve Bannon and some House Freedom Caucus members who want to completely abolish the Federal Reserve or strip its independence entirely. Represents about 20% of the right.
Noise Assessment
Moderate noise level - while political elites debate Fed independence principles, most public discourse focuses on practical economic outcomes like grocery and housing costs rather than institutional governance theory.
Sources (7)
Powell faced a pandemic, an acute bout of inflation and a criminal probe.
<p>In his eight years at the helm of America's central bank, Jerome Hayden Powell has guided the U.S. economy through extreme tumult and fought off unprecedented presidential efforts to undermine the Federal Reserve's independence.</p><ul><li>But that's not what I'll tell my now-young children about Powell once they're old enough to care about central bankers.</li></ul><p><strong>The big picture: </strong>It is Powell's approach to duty and public service that is his ultimate legacy as a leader and that will shape his place in history.</p><hr /><ul><li>The specific highs and lows of his chairmanship, which ends Friday, flow from an underlying sensibility that seems almost from another time.</li><li>In an era when attention, outrage, and spectacle are the currency of the realm, he put his head down and did the work.</li></ul><p><strong>Zoom out: </strong>For the better part of the last decade, I've either watched on a screen or been physically present for pretty much everything Powell has said in public. Two sentences stick most in my memory.</p><ul><li>April 2020: The world was on lockdown, the unemployment rate was nearly 15%, GDP was in free fall, and the future appeared bleak.</li><li>"None of us has the luxury of choosing our challenges; fate and history provide them for us," Powell said. "Our job is to meet the tests we are presented."</li><li>What follows is an assessment of how Powell attempted to do just that — and the successes and failures along the way.</li></ul><img src="https://images.axios.com/tru3FkMXVo75jR3BeM0nuVP1EyI=/2026/05/15/1778855017074.jpeg" /> <div>Powell's first press conference in March 2018. Photo: Alex Wong/Getty Images</div><h2>The accidental Fed chair</h2><p><strong>Just weeks before</strong> President Trump nominated him to the chair in 2017, <a href="https://www.nytimes.com/2017/09/22/upshot/who-will-be-trumps-pick-to-lead-the-fed-we-asked-experts-to-rate-the-odds.html" target="_blank">I surveyed a group of astute Fed watchers</a> on who would get the nod — and their consensus put Powell at a whopping 5%.</p><ul><li>Powell has no advanced training as an economist and was not a close adviser to any of the three presidents who appointed him to the Fed.</li><li>His ascent to the top ranks of global economic policy is, instead, a story of hard work and being ready when the moment called upon him.</li></ul><p><strong>Zoom in: </strong>Powell, a career Wall Street lawyer and dealmaker, was semi-retired when President Obama named him a governor in 2011.</p><ul><li>Powell was also a Republican, albeit of a different era; he had served in President George H.W. Bush's Treasury Department. </li><li>He became a workhorse on the Fed Board of Governors under chair Janet Yellen, helping run the central bank's payment systems and other under-the-radar nitty-gritty.</li></ul><p><strong>In Powell</strong>, Treasury Secretary Steven Mnuchin found a Fed chair candidate who knew how the Fed worked, would largely continue the stimulative monetary policies of the Yellen era, and fit Trump's desire for appointments out of "central casting."</p><ul><li>Trump would soon sour on Powell as the Fed pushed toward raising interest rates over the course of 2018.</li><li>But presidential attacks notwithstanding, the Powell Fed played a major role in both the remarkable prosperity of the circa-2019 Trump economy <em>and</em> in preventing a much more devastating economic collapse from the pandemic.</li></ul><img src="https://images.axios.com/bFHWmsOqyDls31RatqkD98qaDc0=/2026/05/15/1778860266796.jpeg" /> <div>Powell, left, in Jackson Hole in August 2018. Photo: David Paul Morris/Bloomberg via Getty Images</div><h2>Guided by the stars</h2><p><strong>At the Kansas City Fed's </strong>annual symposium in Jackson Hole, Wyo., in August 2018, Powell laid out a shift in how Fed leadership thought about America's economic potential.</p><ul><li>The official name was "<a href="https://www.federalreserve.gov/newsevents/speech/powell20180824a.htm" target="_blank">Monetary Policy in a Changing Economy,</a>" but eight years later, it is known in central banking circles as the "guided by the stars speech."</li><li>In it, he argued that in their dependence on theoretical models for concepts like the "neutral interest rate" and "natural unemployment rate," the Fed had taken their relationships as overly certain.</li><li>Maybe, for example, unemployment could go lower than once assumed without causing prices to spike.</li></ul><p><strong>The upshot </strong>of this was that the Fed should take care to allow the economy of the late 2010s to keep growing and the labor market to keep improving until there was clear evidence in the data that inflation or other downsides were materializing.</p><ul><li>A year later, Powell and the Fed were doing a "mid-cycle adjustment," cutting interest rates three times even though the unemployment rate was at two-decade lows and GDP growth kept powering along.</li><li>The reason? The growth outlook had become bumpier and inflation remained subdued.</li></ul><p><strong>Flashback: </strong>It's easy to forget just how spectacular the 2019 economy was. The unemployment rate averaged 3.7%. Inflation was 1.8%. Wages rose 3.3%. And mortgage rates were under 4%.</p><ul><li>That's a pretty much perfect mix of economic conditions. If only it could have lasted.</li></ul><p><strong>Yes, but: </strong>Did the "guided by the stars" mindset and success of 2018-2019 make the Powell Fed too slow to intervene when inflation emerged as the predominant economic problem in 2021? Let's put a pin in that.</p><div>Data: Federal Reserve; Chart: Neil Irwin/Axios</div><h2>Money printer goes brrr</h2><p><strong>When the COVID-19 pandemic</strong> brought the global economy into a shutdown early in 2020, Powell and the Fed stood up.</p><ul><li>They dusted off the playbook of the 2008 financial crisis, when the Fed deployed a slew of emergency authorities and novel tools to prop up various corners of the financial system.</li><li>But this time it was at comparative lightning speed and with the added logistical hurdle of all the officials involved working from home in quarantine.</li></ul><p><strong>State of play: </strong>The unemployment rate at that time reached a new <a href="https://www.nytimes.com/2020/05/07/upshot/april-jobs-report-unemployment.html" target="_blank">post-Great Depression high</a>, and prices for many goods collapsed so severely that oil futures briefly traded <a href="https://www.nytimes.com/2020/04/21/upshot/negative-oil-price.html" target="_blank">in negative numbers</a>. </p><ul><li>The Fed used its <a href="https://www.penguinrandomhouse.com/books/676448/limitless-by-jeanna-smialek/" target="_blank">limitless</a> ability to create money out of thin air to support the markets for Treasury securities, corporate bonds, money market mutual funds, mortgage-backed securities, small-business lending and more.</li><li><strong> </strong>The Fed's balance sheet swelled to $7.2 trillion from $4.2 trillion between March and June 2020.</li></ul><p><strong>A popular meme</strong> at the time had a cartoonish version of Powell shooting endless cash out from his press conference podium; "Money Printer Go Brrr."</p><ul><li>Even as the immediate financial crisis faded, however, Powell was focused on ensuring that there was a robust recovery once public health considerations allowed a reopening of the economy.</li><li>To that end, Powell stressed that the Fed would use its "full range of tools" — including keeping its interest rate target near zero, buying vast sums of securities and issuing guidance about its future easy-money plans — to try to achieve a labor market recovery.</li><li>In August 2020, Powell codified the ideas he had started developing in the "guided by the stars" speech in a new framework for monetary policy.</li></ul><p><strong>The framework </strong>essentially promised the world that the Fed would not act pre-emptively to slow the economy out of fear of inflation — that it viewed "maximum employment is a broad-based and inclusive goal" and that "a robust job market can be sustained without causing an outbreak of inflation."</p><div>Data: Bureau of Labor Statistics; Chart: Neil Irwin/Axios</div><h2>Not-so-transitory</h2><p><strong>By 2021,</strong> the economy was resurgent, and with it the frictions that come from jump-starting an economy that had partially shut down.</p><ul><li>The unemployment rate remained high, but by that summer, <a href="https://www.nytimes.com/2021/06/05/upshot/jobs-rising-wages.html" target="_blank">evidence abounded</a> that the labor market was rapidly becoming tight — that employers wanted to hire, but couldn't find enough willing workers.</li><li>Financial markets were booming, GDP was booming — and with all that money coursing through the economy and global supply chains still impaired by the pandemic shutdowns, prices began surging as well.</li><li>Inflation surpassed 5% in the summer of 2021, on its way to 9% in mid-2022.</li></ul><p><strong>The intrigue: </strong>Powell and the Fed initially viewed it as a transitory phenomenon — a one-time adjustment that reflected "base effects," the rebound from depressed pandemic pricing, and a one-time result of supply disruptions.</p><ul><li>As such, and consistent with the framework issued just months earlier, the Fed tried to look through the price surge, viewing it as "transitory."</li><li>The result is that the central bank was not just keeping interest rates near zero but pumping $120 billion a month into the financial system through quantitative easing even as the economy was rapidly healing and the worst inflation in decades was taking hold.</li></ul><p><strong>There's also a more subtle way</strong> the Fed's policies in this era may have fueled the outburst of inflation — one that Powell's successor, Kevin Warsh, has articulated.</p><ul><li>With its massive QE program, the Fed essentially put a lid on the federal government's borrowing costs.</li><li>To the extent fiscal action — including a $900 billion rescue package near the end of Trump's term and another $1.9 trillion early in the Biden administration — was excessive and contributed to the inflation surge, Congress may have felt that Powell and the Fed had written lawmakers a blank check.</li></ul><p><strong>By late 2021, </strong>right as Biden decided to reappoint Powell to a second four-year term, it was becoming evident that the Fed had misjudged how sustained and deep-seated the inflation problem was turning out to be.</p><ul><li>As for "transitory" inflation, "I think it's probably a good time to retire that word," Powell told Congress in November 2021.</li></ul><img src="https://images.axios.com/qOKW5JMx4hyrCQBollc-SFi4nVE=/2026/05/15/1778855189577.jpeg" /> <div>Powell at the 2022 Jackson Hole symposium. Photo: David Paul Morris/Bloomberg via Getty Images</div><h2>Keeping at it</h2><p>The Powell Fed was late to its policy pivot — it wouldn't raise interest rates until March 2022 — but was unrelenting in its focus to do whatever it might take to get inflation back under control.</p><ul><li>That included historically large rate hikes of three-quarters of a percentage point at a time starting in June.</li><li>And it included accepting the risk of triggering a recession.</li></ul><p><strong>Between the lines: </strong>Monetary policy works not just through the mechanics of adjusting interest rates, but through setting expectations, which can be self-fulfilling.</p><ul><li>Powell was worried that an inflationary psychology was setting in that could have built on itself, and was willing to promise the possibility of pain to prevent that from happening.</li><li>He held out hope that inflation could be brought down without a recession, but needed to signal to the world that the Fed would tolerate pain in order to achieve price stability.</li></ul><p><strong>The ultimate manifestation of that </strong>came at the Jackson Hole conference in August 2022.</p><p><strong>What they're saying: </strong>"Today, my remarks will be shorter, my focus narrower, and my message more direct," Powell said that Friday morning.</p><ul><li>Higher interest rates, he acknowledged, will "bring some pain to households and businesses. These are unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain."</li><li>"We will keep at it until we are confident the job is done," he said, a subtle invocation of Paul Volcker, the revered Fed chair who broke the back of 1970s inflation.</li></ul><p><strong>As it turned out, </strong>the aggressive rate hikes of 2022 and 2023 caused some pain, but not a recession.</p><ul><li>By September 2024, when the Fed reversed course and cut rates, inflation was down to 2.4%, and the jobless rate was a healthy 4.1%.</li></ul><img src="https://images.axios.com/yniH29Tlrb8xZYJ30V_diqYZTLs=/2026/05/15/1778860106666.jpeg" /> <div>The Federal Reserve building under renovation. Photo: Pete Kiehart/Bloomberg via Getty Images</div><h2>Under pressure</h2><p><strong>In the first Trump term,</strong> as the president became more vocally dissatisfied with the Fed chair he had appointed, Powell's response was stoicism.</p><ul><li>When, for example, Trump asked on Twitter in 2019 "who is our bigger enemy, Jay Powell or Chairman Xi," Powell's reaction was to not react at all.</li><li>He often warned associates in that era that while it was important they not bend to presidential pressure on interest rate decisions, they must also avoid the opposite mistake, of making a policy error out of a desire to show their independence.</li></ul><p><strong>That has all changed in the second</strong> Trump term. The president isn't merely attacking Powell and the Fed with tough talk, but rather through active legal maneuvers.</p><ul><li>That came to a head on a Sunday evening this January, when — faced with Justice Department subpoenas over the Fed's over-budget renovation project — Powell released a video calling out the effort.</li><li>"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president," <a href="https://www.federalreserve.gov/newsevents/speech/powell20260111a.htm" target="_blank">Powell said</a>.</li><li>His purpose was to cast attention on the administration's tactics and rally believers in central bank independence — including in Congress — to his side.</li></ul><p><strong>So far, it has worked. </strong>The Justice Department has backed off on its investigation in order to clear a blockade to Warsh's confirmation. Powell is remaining at the Fed as a governor, contrary to recent precedent, seeking greater assurance that the threat to independence has ended.</p><p><strong>What they're saying: </strong>"I want to note here that this has nothing whatever to do with verbal criticism by elected officials," he said at a press conference two weeks ago. </p><ul><li>"But these legal actions by the administration are. unprecedented in our 113-year history, and there are ongoing threats of additional such actions," he said.</li><li>"I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public — which is the ability to conduct monetary policy without taking into consideration political factors."</li></ul><p><strong>The bottom line: </strong>Powell's stewardship of the Federal Reserve and the U.S. economy is hardly above criticism. His mistakes contributed to the painful inflation of the early 2020s.</p><ul><li>But he has led a crucial American institution for eight long years with a deep sense of public purpose — seeking at every turn to make sure Americans can get a job, rely on the value of a dollar, and count on their central bank to make its decisions for the right reasons.</li></ul>
<p>Kevin Warsh has been confirmed as the 17th leader of the <a href="https://www.axios.com/economy/federal-reserve" target="_blank">Federal Reserve</a>, becoming America's economist-in-chief at a moment of resurgent inflation, public discontent with the economy and unprecedented attacks on the Fed's independence.</p><p><strong>Driving the news: </strong>Warsh was confirmed to a four-year term as Fed chair Wednesday by a 54-45 Senate vote. He received unanimous support from Republicans but only one "aye" vote from a Democrat, John Fetterman of Pennsylvania.</p><ul><li>Warsh takes the helm of the central bank after Jerome Powell's term ends Friday. </li></ul><hr /><p><strong>The big picture: </strong>Warsh has promised sweeping change at an institution that he argues has grown too unwieldy and inclined to intervene in the economy.</p><ul><li>He inherits buoyant financial markets and an AI-driven growth surge — as well as the legacy of five straight years of elevated inflation that has spiked again due to the Iran war.</li><li>High prices and affordability concerns have driven consumer sentiment indicators to recessionary levels, despite a low unemployment rate and solid GDP growth.</li></ul><p><strong>Friction point: </strong>President Trump has demanded that the Fed cut interest rates, and Warsh has previously laid out an intellectual case for doing so premised on a 1990s-style boom in America's supply potential.</p><ul><li>But in recent weeks — including April inflation data the last <a href="https://www.axios.com/2026/05/12/cpi-april-inflation-iran-trump" target="_blank">two </a><a href="https://www.axios.com/2026/05/13/ppi-iran-inflation" target="_blank">days</a> — evidence has pointed toward price pressures being resurgent and the labor market holding up, which undermines the case for rate cuts.</li><li>Indeed, if he seeks rate cuts anytime soon, Warsh will face an uphill battle with his fellow members of the Fed policy committee, who jointly make those decisions.</li></ul><p><strong>Zoom out: </strong>The debate over interest rates will occur against a backdrop of historically unique threats to the Fed's ability to act without regard to political influence.</p><ul><li>A Supreme Court case over whether Trump can fire Biden-appointed governor Lisa Cook is pending.</li><li>Powell is remaining on the Fed Board of Governors, contrary to modern precedent, due to what he sees as an ongoing threat by the Trump administration to reopen a criminal investigation over the Fed's building renovations.</li><li>Warsh also takes the helm with less bipartisan support than any previous leader of the central bank, as Democrats expressed doubt he will be sufficiently independent from the White House.</li></ul><p><strong>Catch up quick: </strong>Warsh was a Fed governor from 2006 to 2011 — then the youngest on record — and was a close ally of chair Ben Bernanke in fighting the financial crisis.</p><ul><li>Warsh stepped down in 2011 amid misgivings about the Fed's post-crisis efforts to stimulate the economy through quantitative easing.</li><li>In the years since, he has become an increasingly sharp critic of the institution he once helped lead, accusing it of mission creep and of massive policy failure in allowing inflation to surge in 2021-2022.</li></ul><p><strong>The intrigue: </strong>An open question is how quickly he will seek to act in remaking the institution.</p><ul><li>He is largely stuck with the top leadership — the other governors, who serve staggered terms, and the 12 reserve bank presidents around the country. But he has broad authority to make changes to the staff at the Board of Governors.</li><li>He has also flagged possible changes to the <a href="https://www.axios.com/2026/04/22/kevin-warsh-fed-communications-policy" target="_blank">Fed's communications approach</a>, including skepticism of its "forward guidance" for signaling future actions, and frequent press conferences.</li></ul><p><strong>Between the lines: </strong>Warsh got the job in part by attacking the way the Fed has operated over the last dozen years.</p><ul><li>Now the question is whether he can deliver economic outcomes — particularly a return to price stability — that prove more satisfying to the American people than the status quo.</li><li>And as Powell learned the hard way, he may have to do it with an impatient president second-guessing him along the way.</li></ul><p><strong>The bottom line: </strong>It's Warsh's economy now.</p>
The vote for Kevin Warsh fell largely along party lines.
Jerome Powell's eight-year role leading the Federal Reserve is over. His term will be remembered as one of the most turbulent and politically charged in the central bank's history. William Brangham discussed Powell's impact and legacy with Jason Furman.
Federal Reserve Chair, Jerome Powell is stepping down after eight years. Here are key takeaways from his tenure.
Jerome Powell’s stint leading the Federal Reserve is finished, but his battle with President Trump is far from over. Powell’s second four-year term as chair of the Fed board ended Friday, two days after his successor, Kevin Warsh, was confirmed by the Senate as the bank’s next chief. After leading the bank for the past…