FOMC members will make these decisions, based solely on their assessment of the data and its implications for the economic outlook and the balance of risks. At the same time, GDP growth has slowed notably in the first half of this year to a pace of 1.2 percent, roughly half the 2.5 percent pace in 2024 (figure 3). The decline in growth has largely reflected a slowdown in consumer spending. As with the labor market, some of the slowing in GDP likely reflects slower growth of supply or potential output. Significantly higher tariffs across our trading partners are remaking the global trading system.
Fed Cuts Rates as Officials Worry About Labor Market
Tighter immigration policy has led to an abrupt slowdown in labor force growth. Over the longer run, changes in tax, spending, and regulatory policies may also have important implications for economic growth and productivity. There is significant uncertainty about where all of these polices will eventually settle and what their lasting effects on the economy will be. (born February 4, 1953, Washington, D.C., U.S.) Jerome Powell is the chair of the Board of Governors of the Federal Reserve System (the Fed), the central bank of the United States.
He retired from the military in 1993, sparking speculation that he would enter politics. Although he decided not to run for president in 1996, he joined the Republican Party and spoke out on national issues. The son of Jamaican immigrants, Powell grew up in the Harlem and South Bronx sections of New York City and attended the City College of New York (B.S., 1958), serving in the Reserve Officers’ Training Corps (ROTC).
Fed Cuts Interest Rates for Second Time This Year
I will then turn to the results of our second public review of our monetary policy framework, as captured in the revised Statement on Longer-Run Goals and Monetary Policy Strategy that we released today. Powell’s efforts to raise interest rates further were met with resistance from President Donald Trump. Shortly after taking office, Powell oversaw his first interest rate increase of 0.25 percentage points. Trump publicly criticized Powell for raising interest rates, arguing the move would slow economic growth and undermine Trump administration policies, and discussed the possibility of removing Powell as Fed chair.
Strains in Short-Term Markets Raise Urgency of Fed’s Balance Sheet Debate
- Counting a couple of virtual appearances during the pandemic, this is the eighth time I have had the honor to speak from this podium.
- Senator Elizabeth Warren, for one, voted against his nomination, citing concerns about his regulatory stance.
- He’s one of seven board members, and his vote carries the same weight as the others.
- When Powell was up for reappointment in early 2022, inflation was soaring.
- Another possibility is that inflation expectations could move up, dragging actual inflation with them.
- This article explores his career path, educational background, financial roots, and the calm yet powerful role he plays in one of the world’s most influential economic institutions.
When Powell speaks, Wall Street listens, and that’s no small thing. Things like open market operations, interest on reserve balances, and the discount window rate. These aren’t just jargon—they’re levers that control how much money flows through the economy, affecting your mortgage, car loan, and even job prospects. In 2025, Jerome Powell is the Chair of the Board of Governors of the Federal Reserve.
In this environment, distinguishing cyclical developments from trend, or structural, developments is difficult. This distinction is critical because monetary policy can work to stabilize cyclical fluctuations but can do little to alter structural changes. As inflation eased and Powell reaffirmed the Fed’s independence following the 2024 election, political tensions surrounding his leadership grew.
What was Colin Powell’s role in the Iraq War?
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- At the same time, GDP growth has slowed notably in the first half of this year to a pace of 1.2 percent, roughly half the 2.5 percent pace in 2024 (figure 3).
- He’s not buried in theoretical models; he’s focused on what works for businesses and everyday people.
- From 1997 to 2005, Powell was a partner, managing investments and strategizing growth.
- One possibility is that workers, who see their real incomes decline because of higher prices, demand and get higher wages from employers, setting off adverse wage–price dynamics.
These aren’t just resume fillers—they reflect a guy who cares about the bigger picture. Have you ever wondered who holds the reins of the U.S. economy, making decisions that ripple through your savings, loans, and investments? Meet Jerome Powell, the Federal Reserve Chair, a name that might not dominate headlines but whose actions shape the financial world. His journey from a young scholar to the helm of one of the most powerful institutions is nothing short of fascinating, and I’m here to unpack it all for you.
In its meeting last month, Fed officials appeared to be divided over whether to cut rates for a third time this year. It’s unclear when the Fed will have insight into the U.S. economy’s health, however, as an ongoing federal government shutdown has postponed reports on inflation and unemployment. In a speech to the Council on Foreign Relations earlier this month, Fed Governor Christopher Waller said he supported the FOMC’s decision to ease monetary policy, indicating his focus had shifted to a “softening” labor market instead of inflation. Waller said that, because policymakers “don’t know which way the data will break on this conflict,” the FOMC would “need to move with care” when adjusting interest rates. Waller noted he has spoken with “business contacts” to form his outlook on the economy while a data blackout continues.
Jerome Powell: From Law to the Fed’s Helm
As the economy evolves, Powell’s steady hand will keep shaping our financial future, one policy at a time. In 2012, Powell’s career took a pivotal turn when President Barack Obama appointed him to the Federal Reserve Board of Governors. It wasn’t a headline-grabbing move at the time, but it set the stage for his rise. Powell joined the board with a term that runs until January 31, 2028, giving him a long runway to influence monetary policy.
That frequency allows policymakers to reassess structural features of the economy and to engage with the public, practitioners, and academics on the performance of our framework. When Powell became head of the Fed in 2018, he was the richest Fed chair since the 1940s, with a net worth of $19.7 million to $55 million. He was expected to maintain the policies of his predecessor, Janet Yellen, including raising interest rates. Under Yellen, the Fed raised rates five times from the near-zero rates put in place after the 2007–08 financial crisis. He’s navigated the Fed through turbulent times, like the post-COVID economic recovery, balancing inflation control with job growth.
Overall, while the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.
Who appointed Jerome Powell as chair of the Federal Reserve?
You can change your settings at any time, including withdrawing your consent, by using the toggles on the Cookie Policy, or by clicking on the manage consent button at the bottom of the screen. Powell disputed the claims, noting that elements like rooftop gardens and VIP dining rooms had been cut from earlier proposals. He Indices Trading Strategies asked the Fed’s independent inspector general to review the renovation process and reaffirmed the central bank’s legal independence from the White House. In July 2025, the White House began publicly criticizing Powell over a $2.5 billion renovation of the Fed’s headquarters and an adjacent building. President Trump accused Powell of mismanaging the project and labeled the spending “disgraceful,” suggesting it could justify removal.
Powell’s career is like a well-curated playlist—diverse, purposeful, and full of hits. After law school, he dove into the world of investment banking in New York City, working at Dillon, Read & Co. from 1984 to 1990. This wasn’t just pushing papers; Powell was learning the nuts and bolts of financial markets, a crash course that would shape his future. From there, Powell headed to Georgetown University, securing a law degree in 1979. While at Georgetown, he wasn’t just hitting the books—he served as editor-in-chief of the Georgetown Law Journal, a role that honed his ability to dissect complex issues.
Senator Elizabeth Warren, for one, voted against his nomination, citing concerns about his regulatory stance. Yet, Powell’s bipartisan support—22-1 in the Senate Banking Committee—shows he’s got more allies than detractors. Navigating these tensions is part of the job, and Powell seems to take it in stride.
His speech before the UN in February 2003, in which he claimed that Iraq had weapons of mass destruction, was later revealed to be based on faulty intelligence. He was chairman of the Joint Chiefs of Staff (1989–93) and secretary of state (2001–05). Whether Trump names his pick to succeed Powell, whose term expires in May 2026, by the end of the year. Treasury Secretary Scott Bessent on Monday said five candidates are under consideration for the role, including Fed governors Waller, Michelle Bowman, former Fed governor Kevin Warsh, National Economic Council Director Kevin Hassett and BlackRock executive Rick Rieder. Bessent said he would present a list of candidates to Trump shortly after Thanksgiving.
“The Federal Reserve is always creative about helping Wall Street and corporations during crises, but workers get left behind,” said Senator Sherrod Brown, then the top Democrat on the Senate Banking Committee. Economists labeled the situation a K-shaped recovery, wherein one segment of the economy improves while another declines (represented by the rising and declining arms of the letter K). The COVID-19 pandemic, and the financial crisis it spurred, forced Powell to change course on interest rates in the spring of 2020. To some observers, these stimulus measures and joint ventures had fused the Fed and the Treasury in the most significant way since the 1950s. “We crossed a lot of red lines that had not been crossed before,” Powell said at an event in 2020.
The revised statement reiterates that the Committee is prepared to use its full range of tools to achieve its maximum-employment and price-stability goals, particularly if the federal funds rate is constrained by the ELB. Evolution of Monetary Policy FrameworkTurning to my second topic, our monetary policy framework is built on the unchanging foundation of our mandate from Congress to foster maximum employment and stable prices for the American people. We remain fully committed to fulfilling our statutory mandate, and the revisions to our framework will support that mission across a broad range of economic conditions. Our revised Statement on Longer-Run Goals and Monetary Policy Strategy, which we refer to as our consensus statement, describes how we pursue our dual-mandate goals.