The numbers look good, but the story of how we got here is complicated.
By the numbers, the tenure of Federal Reserve Chair Jerome Powell looks like a resounding success. He inherited an economy spiraling into the highest inflation in 40 years and, through a series of aggressive policy moves, steered it back toward the Fed’s 2% target. The drop from a peak of 9.1% inflation to today’s more stable 2.1% is a remarkable achievement that has impacted every American’s wallet.
But was it all Powell’s doing, or was he a beneficiary of circumstance? The debate over his legacy is complex, with strong arguments on both sides.
1. Yes, he took the aggressive and unpopular action that was needed.
The primary argument for giving Powell credit is that he used the Fed’s most powerful tool with conviction. Starting in 2022, he initiated the most rapid series of interest rate hikes in decades, a move designed to deliberately cool down an overheating economy. This was the textbook, albeit painful, medicine for inflation that many economists were demanding.
These hikes made borrowing money more expensive, which slowed spending and investment, eventually bringing demand back in line with supply. It was an unpopular policy that risked a recession, but he didn’t flinch from his responsibility to break the back of runaway inflation.
2. No, his “transitory” call in 2021 was a major blunder.
Critics argue that Powell’s greatest success was cleaning up a mess he helped create. For much of 2021, as prices began to surge, Powell and the Fed repeatedly insisted that inflation was “transitory”—a temporary side effect of post-pandemic supply chain snarls that would quickly fade. This miscalculation led them to keep interest rates near zero for far too long.
This delay allowed inflation to become deeply embedded in the economy, forcing the Fed to be far more aggressive with its rate hikes later on. Had they acted sooner, the subsequent economic pain might have been much less severe for everyone.
3. Yes, he successfully engineered a rare “soft landing”.
The biggest fear during the rate-hiking cycle was that the Fed would go too far, triggering a deep and painful recession with massive job losses. This has been the historical outcome of most aggressive anti-inflationary campaigns. However, Powell and the Fed managed to navigate this treacherous path with remarkable skill, achieving the elusive “soft landing.”
As of mid-2025, inflation has been tamed without causing a significant spike in the unemployment rate. The economy slowed down but did not crash. This delicate balancing act is incredibly difficult to pull off and stands as a major accomplishment for the central bank under his leadership.
4. No, the rate hikes inflicted real pain on borrowers and homebuyers.
While the national economy may have avoided a recession, the Fed’s policies caused significant financial pain for millions of American families. The rapid increase in interest rates made car loans, credit card debt, and especially mortgages incredibly expensive. For a generation already struggling with housing affordability, the jump in mortgage rates to over 7% was a devastating blow.
This effectively priced an entire cohort of first-time homebuyers out of the market and put a financial squeeze on anyone carrying debt. It’s hard to give full credit for a “soft landing” to those who felt the very hard landing of their personal financial dreams.
5. Yes, he showed strong leadership by resisting political pressure.
A key role of the Federal Reserve is to be independent of short-term political whims. Throughout the high-inflation period, Jerome Powell faced immense pressure from all sides. Politicians from both parties criticized the rate hikes, either for being too aggressive and hurting growth or for not being aggressive enough. Powell consistently maintained the Fed’s independence.
He stuck to his data-driven approach and clear messaging, even when it was politically unpopular. This steady hand helped manage market expectations and reinforced the credibility of the central bank, which is an essential, if often overlooked, part of its inflation-fighting mandate.
6. No, global supply chains healing on their own did much of the heavy lifting.
A major argument against giving the Fed all the credit is that global factors outside of its control played a massive role. A huge part of the initial inflation spike was caused by snarled supply chains, semiconductor shortages, and backed-up ports during the pandemic. As these logistical nightmares naturally resolved themselves through 2023 and 2024, the supply of goods increased.
This healing of the global supply chain was a powerful deflationary force. As it became easier and cheaper to make and ship products, prices naturally came down. The Fed’s actions certainly curbed demand, but this simultaneous recovery of supply was a huge tailwind that did much of the work for them.