Jay Powell, Pragmatist.

Federal Reserve Chairman Jerome Powell arrived in Washington in February 2018 open to a wide variety of opinions both about macroeconomic policy and the conduct of monetary policy. He intended to be like the chair of a distinguished university economics department. Powell initially bought into the Fed staff's arguments based on the Phillips curve and secular stagnation theories. The Fed raised interest rates four times in 2018.

Since then, Powell has distanced himself from these theories, becoming a convert to the notion that the Fed's number-one goal should be to avoid a scenario like in Japan and the eurozone of perennially undershooting its inflation target. Like most converts, Powell is said to be strong in these convictions, even before the coronavirus hit.

The big unexpected development was the surprise increase in the labor participation rate, thought to be theoretically impossible. This development is why Powell recently said that in effect there is no theoretical ceiling holding back the creation of jobs in America.

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