Jerome Powell got thrown under the bus this week, from the top down. The supposed cable news and social media “experts” piled on. But, if you look at the actual evidence, he deserves our thanks.
Mr. Powell was nominated as Chairman of the Federal Reserve by President Trump in 2017 and easily confirmed by the Senate, assuming office in February 2018. President Biden later renominated him for a second term in 2021, and he was confirmed again in 2022.
During the pandemic, both the Trump and Biden administrations launched massive federal stimulus programs—funded by issuing debt—totaling $3.1 trillion under Trump and $1.9 trillion under Biden, according to the U.S. Treasury Department.
Sorry Republicans and Democrats: this—coupled with massive supply chain disruptions—was inflationary (source: U.S. Bureau of Labor Statistics). The Federal Reserve—along with other central banks around the world—was forced to engage in aggressive monetary tightening to combat the resulting spike in inflation. Skeptics were highly doubtful the Mr. Powell and the Federal Reserve Board could engineer a soft landing.
But that is exactly what happened. Many other factors contributed to the U.S. economy’s relatively smooth soft landing, but when compared to other developed nations, the difference is stark. While much of the developed world slipped into recession or stagnation, the U.S. economy powered through the post-pandemic disruption with greater resilience (source: International Monetary Fund).
So yes—thank you, Jerome Powell.