Jerome Powell: Profile of the Federal Reserve Chair

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Jerome Powell is the 16th Chair of the Board of Governors of the Federal Reserve System. He is a lawyer and former investment banker who has sat on the Fed’s Board since May 2012 and became chair in February 2018. President Donald Trump nominated him to lead the central bank, and President Joe Biden renominated him for a second four-year term as chair, which began in May 2022. His separate term as a governor runs until January 31, 2028.

Powell, who goes by “Jay,” came to the Fed from law, finance and the Treasury Department rather than from academia.

Early Life and Education

Jerome Hayden Powell was born on February 4, 1953, in Washington, D.C. His father was an attorney and his mother was a mathematician. He grew up in the Washington area and attended Georgetown Preparatory School, a Jesuit high school in Maryland.

Powell earned an A.B. in politics from Princeton University in 1975. He then studied law at Georgetown University, where he was editor-in-chief of the Georgetown Law Journal, and received his J.D. in 1979.

Most Fed chairs since the 1980s, including Alan Greenspan, Ben Bernanke and Janet Yellen, were trained economists. Powell is the first chair in more than 40 years without a doctorate in economics. The previous one was G. William Miller, who led the Fed under President Jimmy Carter from 1978 to 1979 and held degrees in marine engineering and law.

Career Before the Fed

• Law and investment banking (1979 to 1990). After law school he clerked for a federal judge and practiced law in New York. From 1984 to 1990 he worked as a lawyer and investment banker at Dillon, Read & Co. in New York City.
• U.S. Treasury (1990 to 1993). Under President George H.W. Bush, Powell served as an assistant secretary and then undersecretary of the Treasury for domestic finance. His responsibilities covered policy on financial institutions, the Treasury debt market and related areas. During this period the Treasury dealt with the 1991 Salomon Brothers scandal, in which the firm submitted false bids in Treasury auctions, and Powell was involved in the government’s response.
• The Carlyle Group (1997 to 2005). Powell was a partner at the private equity and asset management firm, where he worked in its industrial group. This period is the main source of his substantial personal wealth.
• Bipartisan Policy Center (2010 to 2012). As a visiting scholar at the Washington think tank, he focused on federal and state fiscal issues. His work there included the 2011 debt ceiling standoff, where he briefed lawmakers on the consequences of the government failing to raise the borrowing limit.

He has also served on corporate boards and on the boards of charitable and educational institutions, including the Bendheim Center for Finance at Princeton University and the Nature Conservancy of Washington, D.C., and Maryland.

Path to the Chair

Powell’s time at the Fed began in the aftermath of the 2008 financial crisis, when the central bank was still running unusually loose policy. President Obama appointed him to the Board of Governors on May 25, 2012, to fill an unexpired term. Obama reappointed him, and he was sworn in on June 16, 2014, for a full 14-year term as governor ending January 31, 2028.

As a governor, Powell built a reputation as a consensus-minded voice who paid close attention to financial regulation and market structure. In November 2017, President Trump nominated him to succeed Janet Yellen as chair. The confirmation was bipartisan:

• On December 5, 2017, the Senate Banking Committee approved him 22 to 1. The only vote against came from Sen. Elizabeth Warren (D-Mass.).
• On January 23, 2018, the full Senate confirmed him 84 to 13.

He took office as chair on February 5, 2018. His first four-year term as chair expired on February 5, 2022, and he continued as chair pro tempore while the renomination worked through the Senate. President Biden had renominated him in November 2021, and he was sworn in for his second term as chair in May 2022.

The two terms are separate. The chair’s term is four years. The governor’s term is 14 years. A chair whose leadership term ends can stay on the Board as a governor until the governor term runs out, although past chairs have usually left the Board when their chairmanship ended.

Powell as Fed Chair

Rate Moves in 2018 and 2019

Powell inherited a Fed that had begun raising rates after years near zero. The FOMC raised the federal funds target four times in 2018. That drew public criticism from President Trump, an unusual break from the tradition of presidents avoiding comment on monetary policy. In 2019 the Fed reversed course and cut rates three times, which Powell described as a “mid-cycle adjustment” in response to slowing global growth and trade tensions.

Starting in January 2019, Powell also began holding a press conference after every FOMC meeting rather than every other meeting, which expanded how often the chair explains policy directly to the public.

The COVID-19 Response

In March 2020, as the pandemic hit, the Fed cut the federal funds target to a range of 0% to 0.25%, restarted large-scale purchases of Treasury and mortgage-backed securities, and opened emergency lending facilities that reached into corporate bond markets, municipal debt and small-business lending through banks. Several of those facilities required approval from the Treasury and drew on funding authorized by Congress.

In August 2020, the Fed also adopted a revised policy framework under Powell. It said the Fed would aim for inflation that averages 2% over time, allowing it to run moderately above 2% after periods below that level, and it put more weight on the shortfall of employment from its maximum level.

Inflation and the 2022 to 2023 Tightening

As prices rose in 2021, Powell and other officials initially described the increase as “transitory,” tied to supply bottlenecks and reopening effects. Inflation proved broader and more persistent, reaching its highest levels in roughly four decades.

The Fed began raising rates in March 2022 and then moved aggressively, including several 0.75 percentage point increases that year. By July 2023, the federal funds target range stood at 5.25% to 5.50%. At the same time, the Fed shrank its balance sheet by letting securities mature without reinvesting the proceeds. Powell’s August 2022 speech at the Jackson Hole symposium became one of the defining moments of this period: he warned that bringing inflation down would likely bring “some pain” to households and businesses.

In September 2024, the Fed began cutting rates with a half-point reduction, as inflation had eased from its peak.

How Much Power the Fed Chair Has

The chair is often called one of the most powerful people in economic policy, but the formal powers are narrower than that label suggests.

On paper, the chair has one vote on the seven-member Board of Governors and one vote on the FOMC, which sets interest rate policy. The FOMC has 12 voting members: the seven governors, the president of the Federal Reserve Bank of New York, and four of the other 11 regional bank presidents on a rotating basis. The chair cannot set rates alone.

The influence comes from the role around that vote. The chair:

• Leads FOMC meetings and shapes the proposals the committee votes on.
• Manages the Board’s day-to-day operations.
• Testifies to Congress, including the semiannual Monetary Policy Report hearings before the House and Senate.
• Acts as the public face of the Fed through press conferences and speeches, where word choice can move bond yields, the dollar and stock indexes such as the S&P 500.

In practice, FOMC decisions under Powell have usually been reached with few dissents, which reflects the chair’s role in building agreement before votes are cast.

Can the President Replace the Fed Chair?

The Federal Reserve Act lets the president remove a governor “for cause,” a standard generally read to mean misconduct or neglect of duty, not disagreement over interest rates. The act does not say whether a president can strip someone of the chair title while leaving them on the Board. Because of that gap, replacing a sitting chair before the term ends would most likely require removing that person from the Board altogether, which brings in the “for cause” limit and would probably lead to a court challenge.

The normal route is at the end of a term. When a chair’s four-year term expires, the president can nominate someone else, subject to Senate confirmation. That is how Powell himself reached the job: Trump chose not to renominate Yellen in 2017.

Personal Life

Powell has been married to Elissa Leonard since 1985, and they have three children. He lives in Chevy Chase, Maryland. He is a keen cyclist and has at times ridden his bike to work at the Fed. He also plays guitar and golf.

His political affiliation has been a point of interest because he is a registered Republican who was first appointed to the Board by a Democratic president, promoted to chair by a Republican president and renominated by a Democratic one. Senators from both parties supported his confirmations, and that bipartisan record is one reason he has been described as an institutionalist rather than a partisan figure.

The Bottom Line

Investors, borrowers and anyone tracking interest rates have reason to follow Powell, since his remarks at press conferences and congressional hearings can move bond yields, the dollar and stocks. His influence comes from leading the FOMC and building agreement before votes. A president can usually replace a chair only when the four-year term ends, because removing a governor early requires cause and would likely face a court challenge.