When Jerome Powell succeeded Janet Yellen as head of the Federal Reserve three years ago, he offered her a farewell dinner at his home in Chevy Chase, Maryland.
At that time, Mrs. Yellen was passing the baton to Mr. Powell.
Three years later, in many ways, he is passing a baton back to her.
The Fed spent 2020 tackling the economic consequences of the coronavirus pandemic with cuts in interest rates, bond purchases and emergency loan programs. As Fed officials prepare to meet this week, Powell sees his policies on hold because they have already pledged to keep rates low.
Yellen, who is about to become President Biden’s Treasury secretary this week, hopes to oversee a wave of government spending aimed at ensuring that unemployment falls further and prevents inequality from rising. Powell handed the stimulus stick to her promising to keep rates very low until that happens.