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Today is Jerome Powell’s last day as chairman of the Federal Reserve. He held his final press conference two weeks ago, walked out of the room, and that was it. Eight years. Done. Kevin Warsh was confirmed on Wednesday on a 54–45 vote — the most politically divided Fed chair vote in history — and takes over a central bank that is, to put it plainly, in a bind.
Now, most people will tell you Powell did a good job. Stocks went up. Unemployment stayed low. He “saved the economy” during COVID. That’s the version you’ll hear on cable news. But look at the one thing the Fed is actually supposed to do — keep prices stable — and the picture looks different.
Average inflation under Powell: 3.8%. That’s nearly double the Fed’s own target. It’s worse than Greenspan (3.0%), worse than Bernanke (2.1%), and far worse than Yellen (1.5%). You have to go all the way back to Volcker to find a higher number — and Volcker inherited 11.8% inflation and crushed it down to 4.3%. Powell inherited 1.9%... and left it at 3.8%.
Let me put that differently. When Powell took office in February 2018, a dollar was worth a dollar. Today that same dollar buys you about 74 cents worth of stuff. Your grocery bill, your insurance premiums, your property taxes — all of it climbed on his watch. And it was heading the wrong direction again in March, thanks to the Iran war pushing energy prices higher.
And here’s the part that really gets me. Warsh wants to cut rates. The president wants him to cut rates. But three Fed officials just fired a warning shot at the last meeting, voting against even hinting at cuts while inflation runs this hot. Warsh may be the chair, but he only gets one vote out of twelve. He’s walking into a building where half the room thinks the next move should be a hike, not a cut.
Oh — and Powell isn’t leaving. He’s staying on the board as a governor through 2028. Still gets a vote. That hasn’t happened since the 1950s. Make of it what you will.
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