When Jerome Powell succeeded Janet Yellen as Federal Reserve chief three years ago, he hosted a farewell dinner party for her at his home in Chevy Chase, Md.
Back then, Ms. 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 combating the economic fallout of the coronavirus pandemic with interest-rate cuts, bond purchases and emergency lending programs. As Fed officials prepare to meet this week, Mr. Powell sees their policies on hold because they have already committed to keeping rates at low levels.
Ms. Yellen, who is poised to become President Biden’s Treasury secretary this week, hopes to oversee a government spending wave aimed at making sure joblessness falls much lower and preventing further widening in inequality. Mr. Powell has handed the stimulus baton to her by pledging to keep rates very low until that happens.
