On his daily walk to the office, Jerome Powell passes a portrait of his predecessor, Arthur Burns. No one knows how many times the Federal Reserve Chair has silently repeated the same thought to that antique image: "I will not become you."
In the annals of the Federal Reserve, Burns' name stands as a cautionary symbol: he tolerated runaway inflation and ultimately buckled under pressure from President Nixon to cut interest rates. Half a century later, Powell faced a seemingly intractable test. That he ultimately did not walk that path may be his most profound legacy for the institution.
The handover of power is now in its final countdown. On May 13, 2026, the U.S. Senate confirmed Kevin Warsh as the new Federal Reserve Chair with a 54-45 vote. The schedule is set: Warsh is expected to be sworn in on Thursday, May 14, with Powell's term officially concluding on Friday, May 15.
This farewell, however, is different—Powell is not leaving. The former private equity partner and non-economist Fed Chair will remain on the Federal Reserve Board, becoming the first former Chair in 75 years to do so after his term. This decision itself is a final piece of his political legacy and the most delicate sign looming over his successor, Warsh.
"See You, Not Again" On April 29, 2026, as a routine Fed press conference neared its end, Powell stepped away from the podium after delivering a telling line to the assembled reporters: "Thank you all very much. See you, not again."
It was his last time standing there as Fed Chair. The past eight years transformed the role into arguably the most perilous and complex position in central banking history: a once-in-a-century pandemic, the most severe panic in four decades, an unprecedented political siege, and a high-stakes gamble on a "soft landing" few believed possible.
Daleep Singh, former head of markets at the New York Fed, offered what he considered the most accurate assessment: "This was likely the most difficult period to serve as a central bank governor since the Fed's founding."
Spring 2020: Crossing the Line at the Cliff's Edge To understand Powell's eight years, one must start with March 2020. As the COVID-19 pandemic swept the globe, the U.S. Treasury market began to experience functional failure. Internal scenario analyses included a path toward a depression with unemployment peaking near 20% for a year. Powell told colleagues the feeling was like swimming behind a speedboat—struggling to catch up but always falling behind.
His response was forward-looking and decisive. The Fed slashed its benchmark rate to zero in record time, restarted and massively expanded quantitative easing, and unprecedentedly provided direct credit support to corporations and municipalities, pushing the century-old institution into uncharted territory.
"We crossed a lot of red lines," Powell later admitted. "In that situation, you do it first and figure out how to deal with it later."
This time, his gamble paid off. The U.S. avoided a second Great Depression, and the job market largely recovered in about two years—compared to the six years it took after the 2008 financial crisis. Even Donald Trump, who had publicly called him "clueless" and a "bonehead," called to congratulate him as the "most improved player."
The Price of "Transitory" The real test came after the successful rescue. In 2021, as vaccines rolled out, consumer demand exploded, and fiscal stimulus took effect, inflation began to climb. Powell made a judgment he would be repeatedly questioned about later—he believed it was "transitory."
Supply chain bottlenecks would eventually ease, demand would naturally recede, and monetary policy need not react too aggressively. This "miscalculation" became the heaviest policy stain on his eight-year tenure.
By June 2022, U.S. CPI had soared to 9.1% year-over-year, a four-decade high. Stanford economist John Cochrane likened the Fed's framework to a "pre-built Maginot Line"—constructed for old threats and useless when a new one suddenly appeared.
Powell did not dodge Congressional questioning. Facing it, he invoked a line from Frank Sinatra: "I've had a few regrets, sure. Who wouldn't, really? But honestly, you don't get a do-over."
The course correction was late but came with unprecedented force. From 2022 to 2023, the Fed raised rates at the fastest pace in nearly forty years, hiking the federal funds rate by over 500 basis points cumulatively. At the Jackson Hole symposium in August 2022, Powell delivered an eight-minute speech, clearly warning that bringing down inflation would bring "pain," channeling the spirit of Paul Volcker and sending a firm signal to markets.
That evening, a country band played at the reception dinner. In previous years, he would have taken to the dance floor. This time, he remained seated. He told a colleague, "After giving a speech like that, you don't get to dance."
Soft Landing: The "Mission Impossible" Yet Powell did not swing to the other extreme. Some economists and market participants advocated "shock therapy"—deliberately engineering a recession to kill inflation outright. Powell refused: "We simply are not going to hike rates, stop the economy, and then clean up the mess."
In the summer of 2024, the nearly universally deemed impossible "soft landing" quietly materialized. Inflation fell sharply, wage growth moderated, the Fed began cutting rates in September, and the widely anticipated recession never arrived.
"I think this will be remembered as one of the finest performances in modern Fed history," Singh said. Powell himself acknowledged this winning streak as one of his most astonishing achievements—though inflation never returned to the 2% target during his tenure, leaving that unfinished task for his successor.
The Final Battle: He Did Not Become Burns Powell's historical legacy, however, may not hinge on any economic data point. When Trump returned to the White House for a second term, political pressure on the Fed escalated from verbal abuse to a systematic legal offensive.
The President publicly labeled Powell "the biggest loser" and a "bonehead," openly discussing the possibility of firing him. The White House, citing cost overruns in the Fed headquarters renovation, pushed the Justice Department to launch a judicial investigation into Powell. Simultaneously, the Trump administration sought to remove Fed Governor Lisa Cook, a case currently pending in court—all unprecedented in the Fed's century-long history.
Analysts widely believed the true motive behind the investigation was to pressure the Fed into cutting rates for political electoral gain.
In January 2026, Powell did something that stunned the financial world. On a Sunday evening, he released a video, proactively disclosing to the public details of a judicial investigation into him and framing it as such: "The Federal Reserve sets interest rates based on what is best for the public, not on the consequences preferred by the President."
ECB President Christine Lagarde assessed him: "Powell has an inner strength and a principled understanding of his duty that is deeply rooted within him."
Even critic John Cochrane, who had accused Powell of being "inflationary," ultimately offered this historical verdict: "Powell taking on Trump as his final great act, and going into the history books—taking on Trump. I think that reveals his honesty, decency, and reverence for the institution. I doubt anyone else could have done better."
Staying, Because the Fight Isn't Over At his final press conference, Powell announced another surprise for markets—he would remain on the Federal Reserve Board after his Chair term expired. This makes him the first former Chair to stay at the Fed after his term since Marriner Eccles in 1948.
Powell set a condition for his stay: the judicial investigation must be concluded in a "transparent and final" manner. However, the Justice Department only provided private assurances, hinting it could be reopened at any time, without issuing any public statement of exoneration. The Cook removal case also remains unresolved. It seems the battle to defend the institution is not truly over.
Those familiar with Powell noted this decision was a "fundamental counterpunch" to the Trump administration—the criminal investigation, rather than forcing him out the door, solidified his resolve to protect the institution. "If not for this investigation, Powell would never have seriously considered staying," these sources said.
Former senior Fed adviser Jon Faust predicted: "Given that Powell is repeatedly demonstrating to them that their threats cannot constrain him, and the administration seeks credible assurances, I expect his tenure may last for a considerable period."
Staying, however, comes at a cost. Former Cleveland Fed President Loretta Mester pointed out that every future vote Powell casts on the Board will be interpreted as a political signal: "If he ever has to dissent, it will raise more questions about 'the Fed becoming politicized.'"
Powell himself is aware of this dilemma. He said he does not intend to be a "vocal dissenter" nor act as a "shadow Fed Chair." He hopes for something simpler: "a return to a state of respect for the law and normalcy, letting the Fed do what we are supposed to do."
As for how long he will stay—his Board term could last until early 2028, but he has given no clear answer. A former long-time senior adviser stated: "I expect his tenure may last for a considerable period."
A Legacy of Dual Accounts Eight years, two terms: one pandemic, one inflation "miscalculation," one soft landing, and one political offensive that nearly shook the Fed's foundations.
History's final verdict on Powell will hold a dual account. Missing the 2% target for five consecutive years is an undeniable failure of duty. But that video and the battle to preserve independence may be enough to forever distinguish him from Arthur Burns.
Fed historian Peter Conti-Brown said: "His place in history, based on any one of these episodes alone, is already monumental."
And the portrait in the hallway awaits the next person to walk past it.
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