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Fed’s stoic Powell prepares for his greatest challenge

Fed’s stoic Powell prepares for his greatest challenge

The Federal Reserve chairman appears to be prepared to take a leaf out of Paul Volker’s book and become deeply unpopular by raising interest rates.

US Federal Reserve chairman Jerome Powell is expected to discuss tactics to wind back bond purchases at a meeting of central bankers next month.  AP

Matthew CranstonUnited States correspondent

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Washington | There is a reason United States Federal Reserve chairman Jerome Powell recommended last week that people read a book by former Fed boss Paul Volcker, and not one from Alan Greenspan – the other former Fed chief who has a cult following.

That reason is “popularity”, and how to deal with not having it if you start lifting interest rates after years of dirt cheap money.

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Matthew Cranston
Matthew CranstonUnited States correspondentMatthew Cranston is the United States correspondent, based in Washington. He was previously the Economics correspondent and Property editor. Connect with Matthew on Twitter. Email Matthew at mcranston@afr.com

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Original URL: https://www.afr.com/policy/economy/fed-s-stoic-powell-prepares-for-his-greatest-challenge-20210819-p58jzp