After three years of investments made safe by Fed support, markets were caught flat-footed. Stocks fell sharply. 

A spoof video that showed Powell sucking dollar bills back into a printer received tens of thousands of ‘upvotes’ – a signal of support – on Reddit forum WallStreetBets, a million-strong hive of retail investors.

Krishna Guha, vice-chairman of banking advisory firm Evercore, says the “jarring adjustment” on markets reflected surprise at the strength of Powell’s signalling.

“Powell could live to regret being so forward-leaning at a moment when uncertainty relating to the pandemic and its impact on the economy has increased again sharply, and might have adopted a slightly more nuanced position given how much we may learn in the days ahead”.

Elisabet Kopelman from lender SEB says the market reaction seemed premature, adding: “Powell’s comments were mainly about lifting the foot of the gas pedal earlier and there was no talk about tighter policy.”

His apparent shift may prompt recriminations within the Democratic Party. Progressives, who fought against his re-appointment, will fear that unhooking the US’s monetary drip could send fresh shockwaves through its economy. 

Biden may feel satisfied or betrayed, depending on what Powell promised in the lead-up to the decision.

Wall Street bounced back early on Wednesday but ended the session lower. Powell may have spooked traders but the short-term issues – concerns over labour market recovery and if Omicron will prompt new lockdowns – haven’t changed.

Yet going forward, traders might be a little less confident that they know what the man in charge of America’s money will do next – for better or for worse.

“He just did basically a flip-flop in the last month,” Tony Dwyer of Canaccord Genuity told CNBC. “So who’s to say that can’t happen again next year?”