The chorus of critics taking aim at Jerome Powell has grown so constant, it's practically become the elevator music of financial media. Yesterday delivered—surprise, surprise—another volley of attacks on the Fed Chairman, questioning everything from his rate-cutting cadence to his basic competence.
Let's be honest here. Powell-bashing isn't just a pastime on Wall Street anymore; it's evolved into something between a competitive sport and a required credential. Everybody's got a hot take, and they all essentially boil down to: "If I had Powell's job, I'd have done it better." (Easy to say when you're not the one actually sitting in the chair, isn't it?)
The critiques of Fed policy are as American as, well, complaining about Fed policy. But there's something different about this particular wave of attacks. It's gotten personal. Political. Mean-spirited, even.
I've covered Fed politics since the Bernanke days, and I find myself using what I call the "Goldilocks Impossibility Theorem" to understand Fed criticism. The Fed's porridge—no matter what they do—is perpetually too hot or too cold, but mysteriously never just right. Hiking rates? They're strangling growth! Cutting rates? Inflaming inflation! Staying put? Indecisive cowards! It's a game rigged against the very concept of winning.
Has Powell made mistakes? You bet. The "transitory inflation" call will haunt economic textbooks for generations. The Fed probably waited too long to start hiking, then maybe hiked too aggressively, and now might be dragging their feet on cuts. But c'mon—perfection isn't exactly on the menu when you're navigating the world's largest economy through a pandemic, supply chain disasters, and a war in Europe.
What's fascinating about today's criticism is its bipolar nature. Powell's simultaneously being attacked from opposite directions! One camp insists he's moving too cautiously on cuts and flirting with recession. The other warns he's about to unleash 1970s-style inflation by cutting too soon.
Think about that for a second. When everyone's furious with you for contradictory reasons... couldn't that suggest you're actually finding the middle path?
The attack-of-the-day centers on Powell's supposed political calculations—that he's deliberately holding off on bigger cuts until after November to avoid appearing partisan. This theory requires a logical pretzel twist: believing Powell is both politically savvy enough to game out election implications AND politically tone-deaf enough not to realize that appearing to play politics is a Fed chair's cardinal sin.
Look, maybe our frustration isn't really with Powell at all. Maybe—just maybe—we're struggling with the uncomfortable reality that central banks have limitations. After years of treating every economic hiccup as fixable with the right monetary tweak, we're rediscovering that some economic problems lie beyond interest rates' reach.
There's also some convenient amnesia happening. The same voices throwing stones at Powell now were often singing hosannas during the pandemic response. (Remember March 2020? When the Fed's dramatic actions likely prevented financial Armageddon? No? Just me?)
The Powell pile-on will undoubtedly continue through election season and beyond. It's practically required for membership in the financial commentariat these days. But I wonder if history might judge him more kindly than our real-time hot takes. Central banking during structural economic shifts is brutal, thankless work.
Criticize the policy? Fair game. Question the models? Absolutely. Debate the forecasts? Essential.
But the increasingly personal nature of these attacks... that feels like something else entirely. It's our need for a simple villain in an economic story that's anything but simple.
The porridge is never just right. And maybe that says more about the bears than the chef.
