Powell led the Fed’s fight against inflation. It’s not over yet — and it could get even harder

Federal Reserve Chair Jerome Powell has steered the world’s most powerful central bank during a tumultuous period for the US economy, from the pandemic to a historic bout of inflation shortly after.

Federal Reserve Chair Jerome Powell has steered the world’s most powerful central bank during a tumultuous period for the US economy, from the pandemic to a historic bout of inflation shortly after. But the job isn’t finished yet. Inflation is now well below the 40-year highs of 2022, when the US central bank kicked off an aggressive rate-hiking campaign that pushed interest rates to a bruising 23-year high. Tamping down inflation in just over two years without triggering a recession came despite warnings from critics and from Powell himself that such action could have created some “pain” for Americans. And just when it seems like the central bank has tamed inflation — it’s currently a hair above 2%, according to the Fed’s preferred inflation measure — Powell’s Fed faces a new set of economic challenges. President-elect Donald Trump has threatened to impose hefty tariffs and carry out mass deportations, both of which could hike inflation back up and complicate the Fed’s job. Trump’s pick for Treasury secretary, Scott Bessent, has even pondered publicly how to undermine Powell’s influence before his term at the Fed ends in May 2026. Bessent said recently that he thinks Powell should finish his term. James Bullard, who ended a 15-year term as president of the St. Louis Fed in 2023, told CNN that criticism the Fed pegged inflation as transitory in 2021 and thus was slow to act was “fair.” But Bullard, who voted on interest-rate decisions as part of the Fed’s policymaking committee, added that, with Powell at the helm, that same Fed also threaded the needle for a soft landing, when inflation is tamed without a recession.