Stock investors fared very well under Powell, bond investors not so much

• Stock investors benefited significantly: S&P 500 climbed 9% annually (above the century-long average of 6%), while Nasdaq's 14.7% annual gain ranked third-best among Fed chairs since 1970
• Bond investors suffered due to post-COVID inflation and rising rates: bonds returned only 2% annually versus a 6.5% historical average, hurt by inflation peaking at high levels in 2022 and rates reaching 5.5%
• Powell's overall inflation record averaged 1.8% annually across his tenure (below the 2% Fed target and the 3% average for all Fed chairs), though he faced criticism for initially accommodative policies that some say fueled inflation

Summary: Powell's Fed Tenure Shows Divergent Returns for Stocks vs. Bonds

Federal Reserve Chair Jerome Powell is stepping down after serving since 2018, with nominated successor Kevin Warsh expected to take over next month following Senate confirmation. Powell's tenure concludes with stock markets near record highs and the economy showing moderate growth despite avoiding a post-Covid recession.

Stock Market Performance

Equity investors fared exceptionally well under Powell's leadership. The S&P 500 gained approximately 9% annually during his tenure, exceeding the century-long average of 6% for Fed chairs, according to CFRA Research. The Nasdaq performed even better, rallying 14.7% annually—the third-best performance for Fed chairs since 1970, per Bespoke Investment Group.

Bond Market Underperformance

Bond investors experienced significantly weaker returns. The Bloomberg US Aggregate Bond Index returned just under 2% annually under Powell, well below the 6.5% average since the 1970s. Poor bond performance stemmed from high post-Covid inflation and the Fed's subsequent rate hikes to as high as 5.5%.

Inflation Record

Despite criticism over inflation management, overall inflation averaged 1.8% annually throughout Powell's tenure—below the 3% average for all Fed chairs historically and beneath the Fed's 2% target. However, the consumer price index surged during 2022 following massive Covid-era fiscal stimulus.

Legacy

Powell increased Fed transparency through press conferences after every decision, helping investors navigate monetary policy. His investment banking background at Dillon Read and private equity experience at The Carlyle Group informed his accommodative monetary approach, though critics argue this contributed to inflation pressures and asset bubbles.