From Trump beef to 'transitory' inflation, here's what will define Jerome Powell's Fed legacy

• Jerome Powell's tenure as Fed chair is coming to an end.
• Powell's legacy will be shaped by his pandemic response and inflation missteps.
• Market pros think the defining part of his tenure, however, as his push to preserve Fed independence.

Time is almost up on Jerome Powell's eight-year stint as Federal Reserve chairman. How will his tenure as central bank boss be remembered?

It's a question Powell himself has likely grappled with as he's navigated some of the biggest challenges the Fed has seen in decades — from a pandemic to an inflation flare-up to the threats to central bank independence.

So before Powell leads what is probably his final Federal Open Market Committee meeting this week, we asked economists and investors what they think.

Ultimately, Powell's legacy will be a mixed one, with some obvious achievements and some glaring faults, they said. Here's how they graded him on his tumultuous time as Fed chair.

Positive #1 - The pandemic

Powell's first major challenge came in early 2020, when the global economy spiraled into chaos amid the COVID-19 pandemic outbreak. Consumers stayed home, unemployment surged, and stocks fell by 35%.

Using the playbook of former Fed Chair Ben Bernanke, who presided over the central bank during the 2008 financial crisis, Powell and his colleagues flooded the economy with liquidity and slashed interest rates to near zero.

The economic recovery was swift, thanks in part as well to the fiscal stimulus measures from Congress, and stocks surged back to new highs within months.

"The pandemic response was close to flawless," said Jean-Baptiste Wautier, financial and global economic policy leader at Wautier Family Office. "He expanded the balance sheet to nearly $9 trillion, prevented a liquidity crisis from becoming a solvency one, and kept credit flowing when it mattered most. High marks."

Negative #1 - "Transitory inflation"

But Powell's most striking mistake would come on the back of his pandemic success, summed up by a single quote in August 2021: "We expect the inflation effects of these increases to be transitory."

"Transitory" inflation proved anything but. By the time the Fed hiked interest rates in March 2022, prices were already spiraling, and headline inflation would hit 9.1% by summer.

"The transitory inflation thing was a mess, to be sure," said Ben McMillan, the CIO of IDX Advisors. "A lot of people, ourselves included, were pounding on the table: 'You've got to get ahead of this.'"

Positive #2 - Threading the needle

Despite the inflation gaffe, Powell's recovery was praiseworthy, said Josh Stillwagon, associate professor and the division chair of economics at Babson College.

Powell led the US economy to a notoriously difficult "soft landing," in which the bank navigates interest-rate policy without sparking a recession. While there is some debate about whether the soft landing is still in question, there has yet to be a recession in the post-pandemic era under Powell's watch, with the Fed boss threading the needle between the dual mandates of price control and max employment.

Negative #2 - 50 basis points

If there was another mistake from Powell, it would be cutting interest rates too much in 2024, Spatt said — in particular, his move to slash rates by 50 basis points in September 2024.

"I think that actually sort of spurred some of the awkwardness now," Spatt said, referencing the Fed now being in a position where it's even tougher to cut rates after a surge in oil prices.

Peter C. Earle, the director of economics at the American Institute for Economic Research, agreed that the move was a mistake, saying it made the Fed appear politically motivated in the lead-up to the 2024 presidential election.

Positive #3 - Defending the Fed

During both of President Trump's terms, Powell has faced pressure from the president to slash interest rates. But the heat on the Fed was turned up to new highs in 2025.

Early in his second term, Trump expressed interest in firing Powell if he did not lower interest rates. Trump's efforts to influence interest rate policy appeared to escalate when he attempted to fire FOMC board member Lisa Cook to replace her with someone more aligned with his views.

The situation culminated with the Justice Department opening up a criminal investigation into Powell, citing cost overruns on a Fed building renovation. That investigation was finally dropped on Friday, as members of Congress have threatened to block Trump's nomination of Kevin Warsh to succeed Powell if the probe continued.

Some have characterized the threats as one of the biggest assaults on the Fed's independence since the central bank's founding, and it is what investing pros say will likely stand out as the biggest bright spot in Powell's legacy.

"I think he'll go down as a huge hero for having defended Fed independence," said Desmond Lachman, a senior fellow at the American Enterprise Institute.

The verdict

The consensus seemed to be that, despite some missteps, Powell will generally be remembered positively, thanks in large part to how he handled intense pressure from Trump.

Clemens Kownatzki, professor of finance at Pepperdine Graziadio Business School, went so far as to say Powell's legacy could even reach the heights of the most lauded central bankers in history because of his feud with Trump.

"Jerome Powell may be regarded as pivotal as Paul Volcker by strongly advocating for the independence of the Fed," Kownatzki said.

Yet, the traumatic post-pandemic inflation episode will also be part of his legacy.

"On the one hand, I think he should have a very positive legacy, because he defended the Fed's independence," Lachman said. "But on the other hand, you can't say his legacy is that great in that he let the inflation cat out of the bag."

Chester Spatt, a professor of finance at Carnegie Mellon University's Tepper School of Business and the former chief economist at the Securities and Exchange Commission, said it might be too early to know what the final verdict on Powell will be, and that his legacy will evolve in the context of what happens at the Fed and in the economy in the coming years.

In fact, Powell could continue to shape his legacy by staying on the Fed's board of governors until his term is up. It would be a rare occurrence, but it's been discussed as a way for Powell to continue to his fight to keep the administration out of the central bank.