LEADERSHIP
Jerome Powell Steward of the Economy CHRIS TOP H ER H . SMITH , P H . D.
Over the past half century of financial globalization—initiated by President Nixon’s decision in 1971 to untether U.S. commerce from the rules which had governed the international monetary system since the end of World War II—central bank policy communication about interest rate trends has elicited intense scrutiny from both socioeconomic elites and aspiring members of the American middle-class. Amid this turn toward greater market liberalization, the head of the U.S. central bank—the Federal Reserve—wields almost unrivaled rhetorical influence in domestic and international policymaking circles, and within the grassroots of our increasingly digitized mass investment culture. At the time of this entry’s composition, Jerome H. (Jay) Powell is nearing the end of his inaugural four-year term as Federal Reserve Chairman, a position he has held since February 2018, having been tapped for the role by President Trump in November 2017. By most accounts, Powell—a Republican—enjoys strong bipartisan
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RELEVANCE REPORT 2021-22
support and would likely be confirmed for a second term if he receives President Biden’s renomination for extended tenure. However, Powell’s status as the putative nominee is jeopardized by mounting opposition from progressive Democrats in Congress who argue that the Fed Chairman is inherently sympathetic and beholden to the rapacious risk appetites of Wall Street. The degree of attention being devoted to Powell’s renomination process—and the high-stakes attached to its outcome— underscore the enormously important stewardship role that the Fed chair has over the American economy. The modern, post-war Fed formulates its monetary policy agenda according to a dual mandate: 1) the pursuit of full employment — providing a job to every American seeking work—and, 2) the maintenance of price stability at an average annual rate of inflation of 2 percent. The immediate aftermath of the coronavirus pandemic makes public discussion of the Fed’s twinned areas of interest extremely fraught.
