Ranking the Best Fed Chairs Based by Stock Market Performance

In the world of finance, few institutions wield as much influence over the economy and the stock market as the Federal Reserve.

The Fed's decisions on interest rates, monetary policy, and economic stimulus can have a profound impact on the market, making the Fed chair one of the most powerful positions in the world.

In this article, we'll take a look at the stock market performance under each of the 15 Fed chairs since the central bank was established in 1913. We'll rank them based on the annualized inflation-adjusted returns of the S&P 500 during their tenure.

1. Daniel R. Crissinger (1923-1927)

• Annualized S&P 500 returns: 17.2%

• Inflation-adjusted returns: 17.5%

Crissinger's tenure saw the highest stock market returns of any Fed chair. The Roaring Twenties were a time of rapid economic growth, and the stock market soared under Crissinger's leadership.

2. Janet Yellen (2014-2018)

• Annualized S&P 500 returns: 11.9%

• Inflation-adjusted returns: 11.9%

Yellen's tenure saw strong stock market returns, driven by a combination of low inflation, low interest rates, and a booming economy. She is the only Fed chair to receive an "A" grade from a majority of economists.

3. Paul Volcker (1979-1987)

• Annualized S&P 500 returns: 15.4%

• Inflation-adjusted returns: 12.7%

Volcker is best known for his aggressive actions to curb inflation in the early 1980s. His policies led to a sharp recession, but they also laid the groundwork for the economic boom of the 1980s and 1990s. The stock market performed well under his leadership.

4. Ben Bernanke (2006-2014)

• Annualized S&P 500 returns: 5.3%

• Inflation-adjusted returns: 5.1%

Bernanke's tenure was marked by the 2008 financial crisis and the Great Recession. He led the Fed through these challenging times, implementing a series of unconventional monetary policies to stabilize the economy and the financial system. The stock market was volatile during his tenure, but ultimately performed reasonably well.

5. Alan Greenspan (1987-2006)

• Annualized S&P 500 returns: 14.5%

• Inflation-adjusted returns: 10.2%

Greenspan is one of the longest-serving Fed chairs, and his tenure saw the stock market rise to unprecedented heights. However, his policies have been criticized for contributing to the dot-com bubble and the housing bubble, which ultimately led to the financial crisis.

6. William McChesney Martin (1951-1970)

• Annualized S&P 500 returns: 13.6%

• Inflation-adjusted returns: 7.4%

Martin's tenure saw strong stock market returns, driven by a booming post-war economy. He is known for his famous quote, "The Federal Reserve is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up."

7. Jerome Powell (2018-Present)

• Annualized S&P 500 returns: 11.5%

• Inflation-adjusted returns: 11.5%

Powell's tenure has been marked by the COVID-19 pandemic and the resulting economic disruptions. He has implemented a series of aggressive monetary policies to support the economy, and the stock market has performed well under his leadership.

8. Arthur Burns (1970-1978)

• Annualized S&P 500 returns: 5.2%

• Inflation-adjusted returns: 1.5%

Burns' tenure saw the stock market struggle, as the economy was plagued by high inflation and low growth. He is often criticized for his handling of the economy during this period.

9. Thomas B. McCabe (1948-1951)

• Annualized S&P 500 returns: 11.4%

• Inflation-adjusted returns: 6.5%

McCabe's tenure saw strong stock market returns, driven by a booming post-war economy. However, his policies have been criticized for contributing to the inflation of the 1950s.

10. Eugene Meyer (1930-1933)

• Annualized S&P 500 returns: -6.1%

• Inflation-adjusted returns: -13.2%

Meyer's tenure saw the stock market crash during the Great Depression. He is often criticized for his handling of the economy during this period.

11. Marriner S. Eccles (1934-1948)

• Annualized S&P 500 returns: 10.1%

• Inflation-adjusted returns: 7.6%

Eccles' tenure saw the stock market recover from the Great Depression, driven by a combination of New Deal policies and the economic boom of World War II.

12. G. William Miller (1978-1979)

• Annualized S&P 500 returns: 2.1%

• Inflation-adjusted returns: -4.8%

Miller's tenure saw the stock market struggle, as the economy was plagued by high inflation and low growth. He is often criticized for his handling of the economy during this period.

13. Roy A. Young (1927-1930)

• Annualized S&P 500 returns: -1.7%

• Inflation-adjusted returns: -9.7%

Young's tenure saw the stock market struggle, as the economy was plagued by the onset of the Great Depression. He is often criticized for his handling of the economy during this period.

14. Eugene R. Black (1933-1934)

• Annualized S&P 500 returns: -10.2%

• Inflation-adjusted returns: -17.3%

Black's tenure saw the stock market continue to struggle during the Great Depression. He is often criticized for his handling of the economy during this period.

15.  Charles S. Hamlin (1914-1916)

• Annualized S&P 500 returns: -2.1%

• Inflation-adjusted returns: -10.8%

Hamlin's tenure saw the stock market struggle, as the economy was plagued by the onset of World War I. He is often criticized for his handling of the economy during this period.

In conclusion, the stock market has performed well under most Fed chairs, with the notable exception of the Great Depression and the Great Recession. The best-performing Fed chairs, based on stock market returns, are Daniel R. Crissinger, Janet Yellen, and Paul Volcker.