What Powell brings to Fed post: A gift for forging consensus
WASHINGTON — As a choice to lead the Federal Reserve, Jerome Powell defies any recent mold.
He isn’t a trained economist. He’s produced no trail of research. He built a fortune as an investment manager.
Yet by the reckoning of Fed analysts — those who know him and those who don’t — Powell is equipped to lead the world’s most influential central bank, presiding over a U.S. economy on solid ground but hardly without risks.
What Powell brings to the position most of all, they say, are a formidable intelligence, an appreciation of intellectual diversity and a gift for forging agreement. And in five years on the Fed’s board of governors, he has schooled himself in monetary policy while becoming a specialist in areas from banking regulation to the U.S. payments system.
A moderate who is expected to follow the cautious approach to interest rates of the current Fed chair, Janet Yellen, Powell could serve as a steadying force for the U.S. economy as well as a unifying figure among the central bank’s policymakers. As a Fed governor, Powell has never dissented from a central bank decision.
“A consensus builder” is how Shai Akabas, who worked with Powell at the Bipartisan Policy Center, a public policy think tank, describes him. Powell was for two years a visiting scholar at the center, where, among other things, he focused on helping avert a crisis over raising the government’s debt ceiling, until he joined the Fed’s board in 2012. While at the think tank, it was Powell’s task to help convince congressional Republicans — successfully, in the end — that a default on the debt would amount to a catastrophe.
Akabas observed that Powell “was always trying to glean insights from those around him — and use that to form opinions.”
Educated at Princeton University with a law degree from Georgetown, Powell, 64, known as Jay, spent many years in investment management — at Dillon Read and then at the Carlyle Group. His work there made him one of the wealthiest figures to serve on the Fed board: His most recent financial disclosure form places his wealth at between $19.7 million and $55 million. And based on how government disclosures are drafted, his wealth may actually be closer to $100 million.
Yet those who know him describe a man of unshowy modesty and collegiality, with little discernible pre- tension. Earlier this year at Reagan National Airport, Matthew McCormick, a government economist who was traveling with him, said he watched Powell carry a car seat and luggage for a family he saw was struggling to make a connecting flight at Reagan National Airport.
At the Bipartisan Policy Center, Jason Grumet, who founded the center, recalls that the organization didn’t know what to expect from Powell, who had just finished several lucrative years at the Carlyle Group and had earlier held a highlevel Treasury Department post. Yet Powell was content to take an unassuming office near the photocopier with a view of an alley.
“Jay dug in with the intensity of a young analyst,” Grumet said. “He was like a junior staffer.”
A Washington native, Powell has long shown an impulse toward federal policy and service. Early in his career at Dillon Read, he followed Dillon’s former chairman, Nicholas Brady, to President George H.W. Bush’s Treasury Department. Brady had become Treasury secretary, and Powell became undersecretary for finance. His work at the Bipartisan Policy Center followed later in his career, and it led to his nomination by President Barack Obama to the Fed’s board.
In contrast to Powell, his predecessors Bernanke and Yellen were nationally distinguished economists before their Fed chairmanships, with decades of research, papers and books attached to their names. In theory at least, they came to the Fed job prepared to lead the central bank’s response to unforeseen economic crises. What colleagues do know about Powell is that he won’t likely hesitate to rely on colleagues or advisers with deeper expertise. He is described as someone who believes deeply that differing opinions and backgrounds can help build common ground in public policymaking.