Powell Joins the Fed Pantheon

He’s being called the most transformative Fed chairman since Paul Volcker

- Rich Miller and Craig Torres

Jerome Powell was a middle-ranking Treasury Department official in the early 1990s when he first encountered legendary central banker Paul Volcker. “I was frightened of even meeting him,” the Federal Reserve chair recalled last year. “I was just so intimidated by this global figure. And he couldn’t have been nicer.”

Now, with just over 13 months remaining in Powell’s four-year term, some former central bank officials are saying he’ll go down in history as the institution’s most transformational chairman since the 6-foot-7-inch, cigar-chomping Volcker, who died a year ago at age 92. That sounds presumptuous for a man whose term isn’t even over, to be sure, and is without doubt a claim the modest, 5-foot-10-inch Powell would never make. Yet it’s not without merit.

Powell was quick to recognize the economic devastation the coronavirus pandemic could cause and responded in March with the monetary policy equivalent of shock and awe. The Fed cut interest rates to zero and quickly rolled out a suite of emergency lending programs that extended well beyond the banking industry to include borrowers such as Main Street businesses and state and local governments. That went above and beyond what the Fed did during the financial crisis a dozen years ago. “We crossed a lot of red lines that had not been crossed before,” Powell said at a webinar organized by Princeton University in May.