What the S&P 500’s Returns Under Fed Chairs Really Tell Us
What inflation, crises, and starting valuations reveal about stock returns under each Fed chair
By Eli Breece ·
What have the average returns for the S&P 500 looked like under every Fed chair?
Let's review going all the way back to the 1970s.
Arthur Burns presided over a weak market in the 1970s, while Paul Volcker ranks near the top and Ben Bernanke much lower.
Obviously, the Fed’s goal is not push the S&P 500 higher, it's to support maximum sustainable employment and stable prices.
That’s its dual mandate.
In practice, the Fed aims for 2% inflation over the longer run, while seeking the highest level of employment the economy can sustain without undermining price stability.
Congress also names moderate long-term interest rates as a monetary policy goal.
So what does the above data actually tell us?
In reality, it's more of an indicator of what each chair inherited, how inflation and rates changed, and what happened to earnings and valuations.
To start, Burns and Miller both inherited an inflation problem.
The Burns years show why a positive nominal stock return can still leave investors worse off.
Inflation accelerated during the 1970s, and the 1973 oil embargo drove crude prices sharply higher.
Energy costs squeezed households and businesses while investors demanded more compensation for inflation. That can push stock valuations down even as companies report more nominal sales.
The Fed’s history of the Great Inflation documents both the oil shocks and the difficulty of containing inflation without weakening employment.
G. William Miller’s apparent 19.63% annual return is a it more simple, as he chaired the Fed for only 17 months, from March 1978 to August 1979.
Volcker then accepted a severe near-term cost to break that cycle.
The Fed raised rates aggressively; the 1981–82 recession was deep, and unemployment approached 11%.
Yet falling inflation changed the dynamic. Businesses and households could make longer-term plans with less fear that purchasing power would erode unpredictably. As rates and inflation expectations declined, investors could also pay higher prices for future earnings.
So obviously, the starting point matters much more than the Chair.
Alan Greenspan inherited an economy that had already made substantial progress against inflation.
His long tenure then spanned the Great Moderation, the technology boom, the dot-com collapse and the beginning of the housing boom.
Federal Reserve History attributes the calmer economy partly to better policy, while also pointing to changes in the economy and smaller shocks. Crediting one chair with nearly two decades of market returns would overlook those forces, along with innovation and changes in corporate profitability.
Bernanke’s lower number is also inseparable from his starting point. He became chair in February 2006, shortly before the financial crisis and the S&P 500’s devastating bear market. The Fed subsequently cut short-term rates near zero and bought longer-term securities to support credit markets and recovery. Had Bernanke’s term begun at the 2009 market low instead, the return assigned to him would look radically different, even though his policy record would be the same.
Janet Yellen inherited a recovering economy with low inflation and low rates. Her term ended before the pandemic and inflation shock. Jerome Powell’s encompassed the 2020 collapse and recovery, the inflation surge, and aggressive rate increases.
Keep in mind that S&P Dow Jones Indices found that the Magnificent Seven contributed 55% of the index’s total return from 2023 through 2025.
And then we come to Kevin Warsh, who became chair not long ago on May 22, 2026.
Annualizing that short window makes its return look comparable to an eight- or nineteen-year tenure, even though a few trading weeks could change it considerably.
At its September 16 meeting, the Fed raised its target rate by 25 basis points to 3.75%–4.00%, citing elevated inflation amid continued economic growth.
In reality, for investors, the more useful comparison is between economic periods.
Burns confronted inflation that eroded real returns. Volcker’s tightening caused immediate pain but helped restore price stability. Bernanke faced a financial-system collapse. Yellen benefited from a recovery already under way. Powell saw concentrated stock gains alongside enormous economic shocks. Each market return combines the economy a chair inherited with events no chair controlled.
With that being said, Warsh’s eventual S&P 500 ranking will be an interesting historical footnote. He's entered into an incredibly unique rate environment that no Fed Chair in the past has faced. Unfortunately (or fortunately for the Chair) a Fed chair’s legacy is often judged by the performance of the market that they inherited.