From Quadrangle Club to the Federal Reserve: Princetonians reflect on Jerome Powell ’75

Last May, Chair of the Federal Reserve Jerome Powell ’75 delivered the Baccalaureate address to the Class of 2025. Only a few months later, on Jan. 9, he was served grand jury subpoenas as part of a criminal investigation into cost overruns on the Federal Reserve’s Washington headquarters renovation project. 

President Donald Trump accused Powell of lying to Congress about the predicted cost of the renovations, which initially was $1.9 billion. The current cost of the project is around $2.5 billion. On Friday, April 24, the Justice Department dropped the investigation after prosecutors acknowledged in a hearing that there was no evidence of criminal wrongdoing, leaving the matter to the Fed’s inspector general.

“I’d like to know … how many Trump buildings have cost overruns. Buildings have cost overruns like almost the law of nature,” Economics professor and former Vice Chair of the Federal Reserve Alan Blinder said in an interview with The Daily Princetonian before the allegations were dropped. “I guess the criminal offense was they’re claiming that [Powell] lied about [the overruns] … he’s not a liar.”

Powell said that the true reason behind his criminal investigation was his refusal to cut interest rates despite Trump’s constant pressure. On Jan. 11, Powell issued a public statement claiming that he was charged because the Federal Reserve set interest rates based on evidence, economic conditions, and what best serves the public, without giving into political pressure. As of late April, the target range for the interest rate set by the Federal Reserve is 3.50–3.75 percent.  

According to economics professor Nobuhiro Kiyotaki, Trump “wants to stimulate the economy to please the voters,” and lowering the interest rate would achieve this. “It’s not just the Trump government. Any government has a temptation to stimulate [the economy],” he told the ‘Prince’ in an interview. 

Princetonians, past and present, reflected in interviews with the ‘Prince’ on Powell’s time at the University and his role in the Federal Reserve. Powell declined to speak on the record to the ‘Prince.’

“When it came to a criminal investigation, [Powell] had had enough, and he went on television and he didn’t engage in anti-Trump rhetoric, but he defended the independence of the Fed and said how important it was,” Blinder explained, reflecting on Powell’s actions when the investigation was still taking place.“[Powell] viewed [the investigation] as an attack on the Fed’s interest rate decisions, which are not the President’s decisions.” 

At Princeton, Powell was a politics major and a member of Quadrangle Club. His senior thesis was titled “South Africa: Forces for Change” and examined the parameters for potential political change within apartheid South Africa, including its “economic interdependence,” the “strategies and strengths of the emerging Black nationalist movement,” and the “position of White South Africa.” 

“White South Africa must learn to afford her Black countrymen the human dignity to which they are entitled. The failure to do so will render violent confrontation inevitable in the long run,” Powell wrote in his introduction.

Eric Edmunds ’75, a fellow politics major, member of Quadrangle Club, and friend of Powell, recalled their college days fondly.

They regularly spent their time in Quad, playing a game called “Blow Pong,” which entailed two teams standing on opposite sides of the netless ping pong table, blowing one ping pong ball towards the other end. According to Edmunds, the goal of the game was to blow the ball over the edge, and losers would then have to chug a beer. After explaining the rules, Edmunds laughed, “yeah, we did that at Quad Club.” 

As he reminisced on these experiences, Edmunds described their bond as “totally random, totally social, nothing political.” 

“We just had fun,” Edmunds said.

Beyond their four years at Princeton, both have continued to be involved in the Princeton community, especially with Class of 1975 alumni activities. In addition, Powell has served on the advisory council of the Bendheim Center for Finance.

While serving as a class officer for four years during the pandemic, Edmunds helped organize virtual class meetings over Zoom. One particular meeting highlighted classmates who had since taken on positions of distinction, which Powell attended. During the Q&A session, Powell was asked, “what Princeton experiences best qualified him to be Chair of the Fed?” “Serving as beverage manager for Quad Club,” Edmunds recalled Powell saying. 

In his Baccalaureate speech, Powell said that after graduation, while his friends all followed paths in graduate school or positions in the government, he had “no plan.” He had turned down the one piece of academic advice his parents gave him — to major in economics, which he found “boring and useless” at the time. 

“After 13 years at the Federal Reserve, I fully admit that I was completely wrong about that,” he said in his 2025 speech. 

For six months following graduation, Powell worked as a legislative assistant to Republican Senator Richard Schweiker of Pennsylvania before going on to earn his law degree from Georgetown University Law School. 

“We all move at our own pace, and that’s okay,” he told the Class of 2025.

Powell went on to become a lawyer, investment banker, and Treasury undersecretary. Then in 2011, former President Barack Obama nominated Powell as a member of the Board of Governors of the Federal Reserve, America’s independent central bank that implements monetary policy. 

In 2014, Obama reappointed Powell to the Board of Governors for a 14-year term, which will expire on Jan. 31, 2028. In 2017, President Donald Trump nominated Powell as the Chair of the Federal Reserve. After his four-year term ended in 2022, former President Joe Biden reappointed Powell for a second term, which is scheduled to end on May 15. 

“I don’t think any of us had a clue that [Powell] would go on to the career that he has had,” Edmunds said. 

In his role at the Federal Reserve, Powell has frequently clashed with Trump, as Powell’s cautious “wait and see” approach to monetary policy often became a target of Trump’s hastier attitude. In December 2018, Trump was critical of the Fed’s decision to raise the interest rate by a quarter of a percentage point from 2.0–2.25 to 2.25–2.5 percent. In March 2020, Powell faced threats of removal from the President.

While under investigation, Powell addressed accusations of falsifying overrun costs to Congress, explaining that the extra unprecedented costs came from unexpected challenges, such as sudden price surges for materials just before construction began. That is “not lying,” said William Neumann ’27, an economics major and co-captain of the Princeton Federal Reserve Challenge Team, in an interview with the ‘Prince’ before the investigation was dropped.

“That’s telling the truth,” Neumann reflected. 

Maintaining Fed independence without interference from Congress and the White House is important, multiple professors say. The Federal Reserve is an independent agency, but the President has the authority to appoint the Chair and members on the Federal Reserve Board of Governors. The president may also remove members “for cause,” which includes inefficiency, neglect of duty, or misconduct. However, the president may not remove members for policy disagreements. 

After the president nominates members, “he’s supposed to just wind up the toy and let it go through the water. Don’t try to mess around,” Blinder noted. “Now, many presidents don’t have that kind of discipline, and the one that we have now certainly doesn’t have that kind of discipline.”

“[Powell] expressed, ‘I’m going to keep maintaining the independence of the central bank,’” Kiyotaki said, reflecting on Powell’s motivations, “which is important, not just this time, but also [in the] future.” 

The importance of Fed independence goes beyond Powell’s case, as it more broadly ensures that monetary policy focuses on long-term economic stability and remains resilient to short-term political influence, professors say.

After the era of “stagflation” in the U.S. economy between 1964 to 1980, in which inflation grew from 1 percent to 14.5 percent and unemployment grew from 5 percent to 7.5 percent, the Fed decided that it needed to keep monetary policy independent from the government. “That’s what we do in most countries,” Kiyotaki said, “and the Trump administration just kind of ignores this lesson.”

“[The Fed wants] to make sure that there’s an insulation between monetary policy and between elected officials,” Layna Mosley, professor of politics and international affairs and the associate chair of the Department of Politics, said. “There’s always this worry that elected officials might precommit to monetary policy restraint, but then that commitment is not credible.” 

The independence of the Fed is also significant for public trust, according to Mosley. “The idea was that whatever its inflation target or its mandate was, the central bank could better convince investors and firms and households it was going to do what its mandate was, if it wasn’t subject to political influence,” Mosley continued. “And so the idea there is that this then kind of allows for greater policy credibility.” 

While politicians often want to lower interest rates to appeal to voters, the consequences of lowering the interest rate to such an extent is extreme levels of inflation. “Every president in the history of our country, since we had a central bank in 1913, wants to have lower [interest] rates because they want to stimulate the economy … they want to tell all the voters, ‘hey, look, you have your job,’” Neumann said. 

This is why the Fed consists of “technocrats who are not influenced by politics,” Neumann said. 

While Powell’s term as chair is scheduled to end in May 2026, his term on the Board of Governors does not expire until Jan. 31, 2028. At a press conference following the recent Federal Open Market Committee meeting on Wednesday, he revealed that he will be staying on as a governor after his chairmanship ends. His final meeting was notable for having a record number of dissents in recent decades, forecasting even more division within the key rate-setting committee as his chairmanship ends. 

That same day, Kevin Warsh — Trump’s nominee to succeed Powell as the Chair of the Federal Reserve — advanced from the Senate Banking Committee, taking him one step closer to winning full Senate confirmation.

“I think he’s qualified for [the position],” Blinder said. “[Warsh] has a history of being a hawk, and Trump wants a dove.” 

At the press conference, Powell stated that the recent attacks on him and the Fed have “left me no choice but to stay.” When asked when he planned to step down, he said, “I will leave when I think it’s appropriate to do so.” 

Jamie Creasi is an associate Features editor and head Print Design editor for the ‘Prince.’ 

Please send any corrections to corrections[at]dailyprincetonian.com.

Editor’s note: A previous version of this article was sent to press prior to Powell’s announcement that he would continue to stay on as a governor after his term as chair expires. This version has been updated to reflect these developments.