鲍威尔落幕，一个白话美联储的时代结束了

This morning, Powell walked to the podium in the Eccles Building press room for the last time. Just as he had done at every FOMC press conference over the past eight years, he stepped up, adjusted the microphone, and began his opening remarks.

This was Powell’s final public address as Chair of the Federal Reserve. The agenda was routine—reviewing the FOMC’s rate decision and answering questions from reporters. With only two weeks left until his official departure, everyone knew this would be a press conference unlike the others. Still, Powell had a few surprises in store that exceeded expectations.

The decision to hold the interest rate steady in the 3.5%-3.75% range was not surprising, but the four dissenting votes within the committee marked the most divided FOMC meeting since 1992. At the same time, he formally addressed market speculation: he would remain at the Fed.

The last person to choose to stay on as a Governor after serving as Chair was Marriner Eccles in 1948, the man after whom the Fed building is named. That was 78 years ago.

Why did Powell choose to stay? The story of these eight years always begins with "Good afternoon." That was his countless opening lines at the press room podium, and it became his most widely recognized memory on social media. But to understand the weight of today’s decision, we need to turn back the clock eight years.

The "Unqualified" Chair

"I will do everything in my power to achieve the dual mandate Congress has given us: price stability and maximum employment." — Jerome Powell, November 2, 2017, White House Rose Garden, Fed Chair Nomination Ceremony

On the morning of February 5, 2018, Jerome Powell raised his right hand to take the oath in a conference room on the second floor of the Eccles Building. The ceremony was brief, lasting less than three minutes. No president attended. The oath was administered by Fed Governor Randal, a more junior colleague. Two reporters captured the scene: a navy blue suit, a steady gaze, and silence.

At 65 years old, he officially succeeded as the 16th Chair of the Federal Reserve, with an annual salary just over $200,000. Measured against the standards of his four predecessors, he seemed unqualified.

Alan Greenspan held a PhD in economics from NYU and had spent three decades in private economic consulting before his appointment. Before Reagan entered the White House, Greenspan was already recognized as a "market translator" by both Washington and New York. Ben Bernanke was the former chair of Princeton’s economics department, whose 1980s papers on the Great Depression later became the theoretical bedrock for early 21st-century central bank policy. Janet Yellen earned her PhD from Yale and spent most of her career as an academic in Berkeley’s economics department, becoming the first woman to hold the position.

Powell had no background in economics. He studied political science at Princeton for his bachelor’s degree and then earned a law degree from Georgetown. Strictly speaking, he was a lawyer. Powell served in the Treasury Department under George H.W. Bush, rising to Undersecretary, and then spent nearly a decade as a partner at the Carlyle Group. In 2012, President Obama nominated him alongside a Democratic economist to the Fed’s Board of Governors as a political balance. He sat on the board for five years, barely noticed.

To find a similar case of a "non-economist" in the Chair’s seat, you’d have to go back to 1978.

In March 1978, President Jimmy Carter appointed a man named G. William Miller to the Eccles Building. Miller was the former CEO of Textron, a defense contractor. The Carter administration chose him partly because of his good relations with labor, believing he could "control inflation without being too harsh."

But Miller lasted just 17 months in the role. During his tenure, the CPI rose from 6% to 12%, and the dollar experienced its worst crisis on foreign exchange markets since World War II. In August 1979, Carter moved him to Treasury Secretary and brought in Paul Volcker to take over the Fed. What followed is now in every central banking textbook: Volcker pushed interest rates to 20%, engineered a double-dip recession, crushed inflation, and ushered the U.S. economy into the 1980s.

For nearly four decades after Miller, the Chair’s seat was never again occupied by a non-economist—until Powell.

During his five years as a Governor, Powell was almost invisible. From his swearing-in in May 2012 until he became Chair in February 2018, every FOMC vote he cast was with the majority; he never dissented once. His daily work involved technical issues like financial regulation and payment systems, far from the spotlight. Colleagues later recalled that what set him apart during this period wasn’t papers or speeches—it was his phone calls. He wanted to bypass academic papers and official data to hear from people on the front lines of the market. He called bankers, bond traders, and corporate CFOs. A Governor making dozens of such calls each week at his own expense was something his more academically inclined colleagues would never do.

On the afternoon of November 2, 2017, President Trump announced Powell’s nomination as Fed Chair in the White House Rose Garden. Trump gave a forceful speech; Powell delivered a measured one, focusing on "committing to achieving the dual mandate of maximum employment and price stability."

That night, memos from major Wall Street traders to their clients shared the same assessment: a continuation of a moderate, no need for market anxiety. Academia had some dissenting voices. Several economists interviewed by the *New York Times* that day worried whether a lawyer could lead the FOMC in a time of crisis, but those concerns were quickly drowned out by upbeat financial news.

Within a year of taking office, Powell made a structural change. He increased the frequency of post-FOMC press conferences from four times a year to after every meeting, and he adopted the most everyday language, almost entirely avoiding academic jargon. Greenspan’s once-revered "constructive ambiguity" was no longer the Fed’s communication style from that year on. But this new style hadn’t yet become a habit when March 2020 arrived.

Every Choice, Unprecedented

"We will keep at it until the job is done." — Jerome Powell, August 26, 2022, Jackson Hole, Wyoming, Global Central Banking Symposium

March 15, 2020, was a Sunday. Late in the afternoon, Powell convened an emergency FOMC meeting in the Eccles Building, three days ahead of its original schedule. The announcement that followed: a 100-basis-point cut in the federal funds rate to 0-0.25%, the launch of a $700 billion asset purchase program, and the opening of dollar swap lines with five major central banks. It was the most aggressive single action in Fed history.

At that moment, COVID-19 was sweeping across the U.S. ICU beds were running low. The U.S. stock market had triggered circuit breakers twice in the past week. The Treasury market experienced a liquidity freeze that sent chills down every trader’s spine. The deepest market in the world saw days where no one was willing to bid on U.S. government bonds.

Over the next three weeks, Powell introduced a new tool almost every few days. March 17: the Commercial Paper Funding Facility. March 19: the Money Market Mutual Fund Liquidity Facility. March 23: unlimited QE, the reactivation of TALF, and the formation of the Main Street Lending Program. April 9: expanding the corporate bond purchase program to $2.3 trillion. These tools pushed far beyond the Fed’s traditional boundaries.

Buying corporate bonds was something Bernanke explicitly refused to do in 2008. Lending directly to small and medium-sized enterprises, bypassing banks, was a step not even taken during the 2008 financial crisis. In the fall of 2008, after Lehman Brothers collapsed, Bernanke took nearly three months to launch the first round of QE. Powell, from the emergency rate cut on March 3 to unlimited QE, took just 20 days.

On May 17, sitting for an interview on CBS’s *60 Minutes*, Powell said the line that would be quoted repeatedly: "We’re not going to run out of ammunition." He wasn’t making a slogan; he was making a concrete promise to the markets. In the following months, the voices saying he "didn’t act like a Fed Chair" fell silent for the first time.

But his biggest mistake began in this silence.

In the spring of 2021, CPI year-over-year readings started to jump. April: 4.2%. May: 5.0%. June: 5.4%. Powell and his team of economists assessed it as "transitory." They believed it was a disruption caused by the pandemic’s impact on supply chains that would resolve itself within a few quarters. This wasn’t indifference; they genuinely believed it. Powell repeatedly said in internal meetings that he didn’t want to crush a still-recovering labor market over a cyclical disruption. Millions who had lost their jobs during the pandemic, many of them low-income, were just starting to be rehired.

So throughout 2021, the Fed held rates at zero and continued buying $120 billion in assets each month. At every press conference, Powell explained in everyday language why raising rates should wait.

Inflation didn’t wait. September: 5.4%. October: 6.2%. November: 6.8%. From academia, Wall Street, and Republican Senate seats, criticism returned in a new form: a lawyer who couldn’t understand what economists were saying was steering the U.S. into an inflation crisis. Former Treasury Secretary Larry Summers wrote in a *Washington Post* column that he had never seen fiscal and monetary policy so disconnected from reality.

On the morning of November 30, Powell testified before the Senate Banking Committee. Asked about the inflation situation, he said: "I think it’s probably a good time to retire that word [transitory inflation] and try to explain more clearly what we mean."

This wasn’t a forced confession. No reporter had pressed him; no senator had demanded he drop "transitory." He chose to say it himself.

After admitting the mistake, Powell acted swiftly.

March 2022: a 25-basis-point hike. May: 50 basis points. June: 75 basis points—the largest single hike since the Greenspan tightening cycle of 1994. July: another 75 basis points. The market initially interpreted this pace as "catching up," expecting the Fed to soon return to a moderate path. On August 26, the closed-door meeting of global central bank governors opened as scheduled at Jackson Hole. The market expected Powell to offer reassurance there and leave the door open for a potential "policy pivot."

At 10 a.m., Powell took the stage. Typically, a Chair’s speech at such an event lasts about half an hour. But that morning, Powell didn’t look at the teleprompters. The speech lasted only 8 minutes. He didn’t discuss academic frameworks, complex transmission mechanisms, or offer any dovish hints. He conveyed only three points: price stability is the Fed’s responsibility, rate hikes will bring pain, and we will see this through.

The speech’s final line was, "We will keep at it until the job is done." Those who understood recognized it immediately as a nod to an old Chair’s language. *Keeping At It* was the title of Paul Volcker’s 2018 memoir. In his 1979 anti-inflation campaign, Volcker drove rates to 20% and the economy into a double-dip recession, later summarizing those days with those three words. Powell mentioned Volcker three times in his 8-minute speech. He didn’t compare himself to Volcker, but he chose to end with Volcker’s words.

By the end of the speech that day, the S&P 500 had fallen 3.4%, and the Nasdaq had dropped 3.9%. It was the market’s final disappointment in the promise of a "continuation of a moderate."

He knew the market would drop after those words. He said them anyway. It was, four years into his tenure as Fed Chair, the first time he made everyone see he wouldn’t let his past define him.

After Jackson Hole, Powell didn’t let up on rate hikes. September: 75 basis points. November: 75 basis points. December: 50 basis points. In March 2023, Silicon Valley Bank (SVB) collapsed within 48 hours—the second-largest bank failure in U.S. history. Powell did something else that defied market expectations: he created the Bank Term Funding Program (BTFP) to rescue banks while simultaneously raising rates by 25 basis points.

This "two-handed approach" was hard to understand within a traditional central banking framework, because liquidity rescue and tightening policy should point in opposite directions. But Powell wasn’t someone who followed the textbook. He treated "system stability" and "inflation target" as two separate things: one set of tools to save banks, another set to tame inflation. It was a lawyer-like, instrumentalist mindset: use the right tool for the right problem, without letting the logic of one issue crowd out the other.

By the final rate hike in July 2023, the federal funds rate had reached the 5.25%-5.50% range, the highest in 22 years. The cumulative tightening cycle totaled 525 basis points.

Inflation finally began to recede. By June 2024, the year-over-year CPI was back to 3.0%. By the end of the year, it was 2.9%. The unemployment rate remained near historic lows throughout the entire tightening cycle, without the sharp rise typical of a recession. It was the first time since the 1980s that the Fed had brought down high inflation without plunging the economy into a broad recession.

Economists have since debated whether he was "lucky"—the unique nature of the pandemic shock made his tools more effective than theory would suggest, and falling energy prices also helped. The debate will continue.

In his final press conference, Powell summarized these eight years: "We actually experienced four supply shocks: the pandemic, the Russia-Ukraine conflict, tariffs, and now Iran and the oil price spike. Each supply shock had the capacity to push up both inflation and unemployment, and a central bank doesn’t really know what to do." It was precisely this macro environment—unseen in decades—and the unprecedented actions the Fed was forced to take, that made this morning’s committee the most divided since 1992.

But in those 8 minutes on the morning of August 26, 2022, his judgment was a real judgment, the risk he took was a real risk, and his choice not to be defined by his mistake in 2021 was a real choice.

The Watchman Inside the Door

"I will not resign." — Jerome Powell, November 7, 2024, FOMC Press Conference, responding to "can the president fire the Fed Chair"

On the afternoon of January 11, 2026, Powell recorded a video in a conference room in the Eccles Building. The backdrop was the Fed’s seal. He looked into the camera and said: "This criminal indictment threatens the Federal Reserve's right to set interest rates based on its best judgment for the public, not according to the President’s preferences."

The video was released by the Fed’s official account that evening. Global financial media refreshed their headlines almost simultaneously. It was the first time in the Fed’s 113-year history that it had engaged in such direct public confrontation with the executive branch.

The trigger had come a few days earlier. Citing the Fed’s headquarters renovation project, the Department of Justice served Powell with a grand jury subpoena, initiating a criminal investigation into him. The DOJ’s rationale was that the project had cost overruns and irregular procurement procedures.

But everyone knew what this was really about. Over the past twelve months, President Trump had repeatedly demanded that Powell cut rates to align with his tariff policy. Powell maintained his own pace,