When Jay Powell ascended to the role of chair of the Federal Reserve in 2018, few anticipated the political storm he would face—and even fewer would have predicted how adeptly he would navigate it. Powell, appointed by President Donald Trump, has spent much of his tenure handling economic crises, managing criticism, and building relationships with lawmakers. And yet, despite his unparalleled success, the key to his survival has been something many in Washington shy away from discussing: his political acumen.

Powell, as his colleagues often describe him, is not the intellectual powerhouse his predecessors—Janet Yellen, Ben Bernanke, or Alan Greenspan—were. He’s not the kind of economist who dazzles with sharp, groundbreaking theories. Instead, Powell’s strength lies in his ability to master the subtle art of politics, understanding the impact of economic decisions on the political landscape.

A Skilled Political Operator

Over the course of his leadership, Powell has demonstrated an exceptional ability to maintain the Federal Reserve’s autonomy while engaging with lawmakers. His approach to navigating political waters has been nothing short of strategic, from listening to lawmaker concerns to explaining the Fed’s actions in terms ordinary people can understand. This has helped build credibility with Congress, making it easier for the central bank to set monetary policy without becoming embroiled in partisan bickering.

While Powell has been careful to avoid any appearance of political favoritism, his active role in engaging with both sides of the aisle has proven invaluable. House Financial Services Chair Patrick McHenry (R-N.C.) credits Powell with keeping the Fed out of the political crossfire, saying, “Powell has shown enormous skill in keeping the Fed out of the political morass of the rest of Washington.”

His willingness to engage with lawmakers—whether at the Alfalfa Club or in formal Congressional hearings—has been crucial in navigating the tumultuous political terrain of recent years, including the Trump administration’s attacks and the economic havoc of the COVID-19 pandemic.

The Politics of Monetary Policy

Powell’s ability to separate politics from monetary policy is often touted, especially as the Fed prepares to lower borrowing costs in the lead-up to the 2024 presidential election. Many economists predict the move will boost economic growth and energize the stock market. But, as Powell has insisted, his actions will remain independent of political pressures, emphasizing that “integrity is priceless” and that the Fed will maintain its credibility regardless of the political climate.

His political skills, however, are most evident in how he has insulated himself from partisan conflict while maintaining a strong rapport with Congress. As former Senator Pat Toomey, a frequent critic of the Fed’s policies, notes, Powell’s active engagement with lawmakers made it easier for the Fed to take decisive action during times of crisis, like the onset of the pandemic.

An Affable Yet Strategic Leader

Despite his extensive background in investment banking and private equity, Powell avoids the stereotypical demeanor of a Wall Street executive. His approachability and affability have played a pivotal role in smoothing over disagreements, even when the Fed faced intense scrutiny.

For example, when Powell testified before Congress, members often take the opportunity to praise his work, with the tone usually friendly rather than adversarial. And when confronted by lawmakers about the Fed’s economic decisions, Powell remains measured, resisting the urge to declare any policy actions as definitive victories.

This “soft landing” approach earned Powell respect from across the political spectrum, even among those who have often criticized his policies. Former Fed General Counsel Scott Alvarez notes that Powell’s willingness to delegate contentious issues to his board members and focus on bipartisan solutions has allowed the central bank to avoid taking extreme positions on regulatory matters.

Navigating Challenges with Flexibility

What sets Powell apart from his predecessors is his flexibility in economic thinking. While other Fed chairs had a more rigid approach to economic theory, Powell’s background in finance allows him to adapt and explore a variety of ideas. As former Fed Vice Chair Randy Quarles puts it, Powell’s views are shaped by the wide range of perspectives he engages with, which has made him an effective leader in navigating the uncertainty of the post-pandemic economy.

While Powell has resisted calls for heavy-handed regulation of financial institutions, he’s also avoided the ideological extremes that might otherwise drive partisan divides. He has been strategic, focusing on stabilizing the financial system and finding common ground between the political extremes.

The Man Behind the Chair

Powell’s personal history in Washington has undoubtedly helped him in his role as Fed chair. Growing up in the city, attending Georgetown Prep with figures like Supreme Court Justices Neil Gorsuch and Brett Kavanaugh, and later working in investment banking, Powell is at home in the corridors of power. But despite his elite background, he avoids the arrogance often associated with the financial world, striking a balance between affability and competence.

In the midst of political battles and economic turmoil, Powell’s ability to balance the demands of the Fed with the expectations of lawmakers has made him an invaluable asset to the country’s economic stability. As he faces the political challenges of 2024, his reputation as a steady hand in times of crisis will be essential—proving that a mastery of politics, while not always acknowledged, is an indispensable skill for leading the Federal Reserve.

In the end, Jay Powell may not have the intellectual bravado of his predecessors, but his political savvy and ability to navigate Washington’s complex terrain have made him a uniquely effective Fed chair—one who will likely weather the political storm with grace