TrendMacro conversation with Nick Timiraos on Powell's crisis response and the inflationary aftermath

Powell came to the Fed with extensive government crisis-management experience going back to 1991 with the Bank of New England and Solomon Brothers failures and the debt-ceiling cliff in 2011. Before the pandemic crisis, he was liked by members of both parties, in part because he was enduring attacks by Trump. As the pandemic unfolded, he deployed the Bernanke arsenal from 2008 and constantly had to invent more, including a controversial fund that bought junk bonds. He was an avid advocate for fiscal support for the economy to complement the Fed's monetary efforts, despite what were arguably excess supports in the American Rescue Plan of 2021 that would ultimately contribute to an inflationary impulse. Now he finds himself fighting underlying inflation, fearing that it will embed itself in permanent wage-growth expectations. His rapid-fire hiking campaign has now hit a speed-bump with the Silicon Valley Bank failure, creating a potentially irreconcilable conflict of crises that require contradictory policy solutions.