- After eight years, Jerome Powell's term as Fed chair will end in May.
- His employment and inflation record is mixed, with a major pandemic shock.
- Powell has kept policy moderately restrictive despite White House pressure.
It's Jerome Powell's curtain call.
The Federal Reserve chair's term is set to end on May 15 after eight years leading the central bank, making this week's Fed meeting his last in the post. Trump nominee Kevin Warsh is likely to be greenlit by the Senate as his successor.
"I really want to turn this job over to whoever replaces me with the economy in really good shape," Powell said in December, adding, "I want inflation to be under control, coming back down to 2%, and I want the labor market to be strong."
Ahead of Wednesday's interest rate decision, Business Insider reviewed Powell's economic record.
Unemployment has been historically low, with a pandemic spike
Under Powell's first two years as Fed chair, unemployment was notably low. That changed in April 2020, when the onset of the pandemic pushed the figure up to 14.8%, the highest since at least 1948, when the modern unemployment rate was first published, largely driven by furloughs, layoffs, and business closures.
Unemployment has cooled since, and has hovered around 4% for the past few years — a number that's historically low, but still higher than when Powell took over. Labor force participation has also weakened, reaching its lowest rate since the 1970s in March, excluding the pandemic.
Once robust job creation lost momentum
The job market has faced a laundry list of headwinds during Powell's tenure: the pandemic, an immigration slowdown, and high borrowing costs in response to persistent inflation.
It took around two years for employment to recover from the historic COVID pandemic drop — much quicker than the six-year recovery from the 2008 financial crisis.
The Great Resignation during the recovery from the pandemic, featuring a hot labor market where workers felt free to quit for better offers elsewhere, has fizzled out.
The job market of the last couple of years has instead been defined by low hiring, decreased demand from employers, and a low quit rate. While leisure and hospitality suffered most at the onset of the pandemic, Big Tech companies have faced the biggest consequences of early 2020s overhiring. The booming healthcare sector is largely propping up the sluggish job market.
Inflation has remained stubbornly high
Inflation has remained stubbornly high during Powell's time as chair, with a rapid rise in 2022 driven by "strong consumer demand, and highly accommodative monetary and fiscal policy," Stephen Kates, a financial analyst at Bankrate, said.
The chaos of the last few years has added to inflationary trouble on the supply side as well. Jason Draho, the head of asset allocation for the Americas for UBS Global Wealth Management, said that inflation was boosted by "supply chain disruptions and dislocations caused by the pandemic, further exacerbated by the start of the Russia-Ukraine war, which caused oil prices to go higher."
The year-over-year CPI inflation rate rose from about 1% in late 2020 to 9.1% in June 2022. It cooled down to around 2% at the start of 2026, but accelerated in March due to the Iran war.
"In hindsight, it is easy to say that the Federal Reserve acted too slowly to address inflation," Kates added. "However, the Board also carried out one of the fastest increases in the federal funds rate in history once it began tightening."
Core prices crept up
In pursuit of stable prices, the Fed typically targets the core personal consumption expenditures price index, which excludes volatile food and energy prices. That rate shifted from 1.6% in February 2018 to 3% in February 2026, above the 2% target rate.
"Certainly, the last two years have created different inflation shocks, from tariffs to what's happened with Iran that has sort of worked against the Fed," Draho said. "It's certainly complicated their life, but the trend still suggests, all right, inflation should be coming down. And again, these events should be one-off shocks."
Monetary policy has been moderately restrictive
Powell and the FOMC hiked interest rates in response to the post-pandemic inflation spike, and then slowly cut throughout last year. Kates told Business Insider that "in the moments that mattered, conducting monetary policy in a fog of global economic uncertainty was a formidable task."
He added that Powell has remained focused on the central bank's dual mandate, especially alongside escalating political and legal pressure from the Trump administration in favor of lower rates. "Jerome Powell's tenure will likely be viewed favorably, offering lessons that economists can use to better inform future policy," Kates said, calling Powell "a consensus builder within the Federal Reserve."
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