Jerome Powell has thrown himself, all guns blazing, into saving the nation’s economy from the grips of the coronavirus recession.
And yet the White House heaps ridicule on him.
Last week, top White House trade adviser Peter Navarro said Powell had “probably the worst bedside manner of any Fed chairman in history. … The old joke in the marketing thing is, if Jay Powell was going to market sushi, he’d sell it as cold, dead fish.” And top White House economic adviser Larry Kudlow said Powell needed to lighten up a little: “You know, a smile now and then. … I’ll talk with him, and we’ll have some media training at some point.”
The scornful comments came after the stock market went into a tailspin last week when Powell shared his view on where the U.S. economy is heading. He pointed out that even as people were returning to their jobs, the country is “still going to face, probably, an extended period where it will be difficult for many people to find work.” His warning, combined with new coronavirus hot spots in the country, sparked a steep stock market sell-off.
Powell has certainly endured more humiliation in his two-plus years as Fed chairman than in the entirety of his 40-year career. In fact, no Fed chair has ever been ridiculed publicly as much as Powell has.
President Trump, who nominated Powell, has dubbed him an enemy of the state and a “fail,” with “No ‘guts,’ no sense, no vision! A terrible communicator!” He has mused, “Where did I find this guy Jerome?” The president’s main issue is that he is allergic to any increase in interest rates. The Fed, under Powell’s leadership, had in 2018 increased interest rates by four times to prevent the economy from overheating.
Powell mostly bears the White House insults in silence. At almost every appearance, when journalists ask him about whether he feels under pressure, Powell has responded by saying he will not cave to political pressure: “We won’t make mistakes of integrity or character.”
Powell unleashes the Fed’s power
In recent weeks, Powell has seized the reins of leadership with a force that leaves almost every Fed leader in the dust. When the U.S. economy screeched to a halt because of the coronavirus, the Fed’s unleashed a set of actions that far surpass anything that the central bank has ever done in its history.
First, the Fed slashed interest rates to zero. Then it announced a dizzying list of initiatives to get money flowing into the economy, prompting even the staid research team at Wells Fargo Economics to release a report in April titled “The Fed Goes Nuclear.” In all, the programs could combine to provide more than $6 trillion of liquidity to banks, large and small businesses, and even struggling municipalities.
A lifelong Republican, Powell even reached across the aisle to House Speaker Nancy Pelosi to influence her on the $2 trillion economic rescue package. She recounted a phone conversation with Powell, who told her to rely on historically low interest rates to “go big.”
Trump briefly conceded that Powell was his most improved player. But that didn’t last. The president tweeted last week: “The Federal Reserve is wrong so often.“
Still, Powell, who is testifying Tuesday and Wednesday before Congress, has shown no sign of caving to the pressure and doesn’t plan to quit. To understand why he soldiers on, it’s worth looking at his background.
Powell likes binders
Powell is mild-mannered, almost professorial in public appearances such as the regular press conferences he holds after every Fed meeting.
“This is a guy who does his homework,” Jason Grumet of the Bipartisan Policy Center told The Washington Post. “In the three years we worked together, there was only one thing he ever asked for: Larger binders.”
The Fed chair draws an annual salary of just over $200,000. But Powell certainly doesn’t need the money. He is one of the richest individuals to lead the Fed, with a net worth of between $19.7 million and $55 million, according to a financial disclosure. Powell has worked as an investment banker and at one of the world’s top private equity firms, the Carlyle Group.
Despite lucrative jobs in finance, Powell has returned time and again to serve the country throughout his career. First in the early 1990s, as an undersecretary of the Treasury, then in 2010 at the Bipartisan Policy Center, a think tank. In 2011, President Barack Obama nominated him to the Federal Reserve’s board of governors. Powell took over as chair in 2018 after being nominated by Trump.
And this time, under his leadership, Powell has found a way to serve the country decisively and magnanimously. Powell is unapologetic about the Fed’s massive efforts to rescue the economy and says it stands ready with more. He recently said: “We are not out of ammunition.”
Powell wants to save America. And as he determinedly pushes forward to achieve his plan, the president continues to undercut him.
Pallavi Gogoi is NPR’s chief business editor.