Powell exits amid another bond market surge
Jerome Powell is leaving the Fed chairmanship at a time when the bond market is once again under pressure. The 10-year Treasury yield is posting its largest weekly rise since April 2025, climbing 23.5 basis points, or 5.39%, in just one week. After ending 2025 near 4.16%, the yield fell to a low of 3.926% before surging to as high as 4.599% today. The move underscores just how volatile the interest-rate landscape has become — fitting for the close of one of the most turbulent Fed tenures in modern history.
The 10-year yield roller coaster during Powell’s tenure
When Powell officially took over from Janet Yellen on February 5, 2018, the U.S. 10-year Treasury yield was trading near 2.85%. During his tenure, the Treasury market experienced historic swings. The low point came during the COVID panic in 2020, when the 10-year yield collapsed to roughly 0.50%, with some intraday trades briefly dipping below 0.40% as investors rushed into safe-haven assets. From there, yields staged a dramatic reversal, eventually peaking near 5.02% in October 2023 — the highest level since 2007.
That means Powell’s tenure saw the 10-year yield travel through a range of more than 450 basis points from the pandemic low to the 2023 high — one of the most volatile interest-rate cycles in modern Treasury market history.
Inflation surge became the defining macro story
The broader U.S. economy experienced equally historic swings under Powell’s watch. Inflation, measured by CPI year-over-year, fell as low as 0.1% in May 2020 during the COVID shutdown recession before surging to 9.1% in June 2022 — the highest inflation reading since 1981. That inflation shock ultimately became the defining macroeconomic event of Powell’s chairmanship and forced the Federal Reserve into its most aggressive tightening campaign since the early 1980s.
GDP saw historic collapse and rebound
GDP growth also moved through unprecedented extremes. Real GDP contracted at a -31.4% annualized pace in Q2 2020 during the pandemic collapse, only to rebound by +33.8% in Q3 2020 as the economy reopened. Those back-to-back quarters marked the largest contraction and rebound in modern U.S. economic history.
Labor market experienced historic extremes
The labor market followed a similarly dramatic path. When Powell took office, the unemployment rate stood near 4.1%. During the COVID shutdowns, unemployment exploded to 14.8% in April 2020 — the highest level since the Great Depression era. Yet the recovery proved equally historic, with unemployment eventually falling to 3.4% in early 2023, the lowest level since 1969. Today, the unemployment rate sits near 4.3%, remarkably close to where it was when Powell first assumed the role.
The major policy cycles of the Powell era
Looking back, Powell’s tenure can largely be broken into several major policy and market cycles:
- 2018 tightening cycle: Powell entered office continuing the Fed’s gradual rate-hiking campaign inherited from the Yellen era.
- 2019 pre-COVID easing: Slowing global growth and trade-war concerns led the Fed to pivot toward rate cuts before the pandemic began.
- 2020 COVID crisis: The Fed slashed rates to near zero, launched massive quantitative easing programs, and stabilized financial markets during the pandemic panic.
- 2021–2022 inflation shock: The Fed underestimated the persistence of post-pandemic inflation, delaying aggressive tightening as inflation pressures accelerated.
- 2022–2023 rapid tightening cycle: Powell then led one of the fastest rate-hiking campaigns in Fed history to regain control over inflation expectations.
- 2024–2026 higher-for-longer transition: As inflation gradually eased, the Fed shifted toward maintaining restrictive policy before eventually beginning the process toward lower rates.
Powell’s legacy will remain heavily debated
Critics will likely point to the delayed response to post-COVID inflation as Powell’s biggest policy mistake. The Fed initially viewed inflation as “transitory,” only to be forced into an aggressive catch-up tightening cycle once price pressures became embedded in the economy
