The article was originally published in February 2018.

Amid one of the most volatile trading days of the year, Jerome H. Powell became the 16th chairman of the Federal Reserve on Monday. His appointment comes in the wake of a teetering stock market, signaling the largest sell off seen this year.

Ahead of Powell's ceremony on Monday, the Dow Jones Industrial Average (DJI  ) plunged more then 1,100 points before coming back, a drop of more then 4.6%. It was the indexes biggest ever point decline in a single day. The S&P 500 (NYSE:S&P) dropped 4.1% on Monday. Both indexes continued their volatility throughout the day.

Several analysts are suggesting the newly-appointed chair of the Fed as one of the contributors to this volatility, as markets react to shifting Federal Reserve policy. The former Fed chair, Janet Yellen, advocated bailing out the markets, Powell seems more inclined to let the markets do what they do, signaling a shift in Federal Reserve policies.

© US Government

Historically, we've seen newly appointed Fed chairs come into office with a volatile stock market on their hands due to this shift in policy stance.

According to CNBC, "coincidental or not, during the first months of each of the past few Fed chairs there was a fairly significant stock market sell-off, the most pronounced of which was the 1987 market crash just two months after Alan Greenspan became chair."

Prior Fed chair Yellen came into office following a market sell of nearly two weeks after she was sworn in. Previous Fed chair Ben Bernanke came into office with a 7.8% sell off.

In the case of Powell, the market is anticipating tighter Fed policy, both from higher interest rates and the balance sheet unwinding. Economic indicators are the largest influence over this volatility, not necessarily Powell's appointment.

A large component of this fluctuation we are seeing in the market is due to the recent January jobs report, suggesting accelerating inflation is ahead of us. The equity markets are reacting to the upcoming interest rate hikes that may be sooner than investors anticipated if inflation gets ahead of its 2% range.

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With a strong economy booming ahead, inflation seems to be the only indicator that is lagging behind and will be a significant contributor to any market fluctuations we see going forward.

Bloomberg reports: "Global growth has picked up, job gains continue at a robust monthly pace, business investment has risen in recent months and Congress has just passed a set of tax cuts." Inflation is still at historically low levels. After the recent jobs report and an increase in wages, fear that higher inflation might force the fed to raise rates faster than expected may have sent the stocks plunging last week.

The recent volatility in the market isn't worrying Powell for now though. Several analysts suggest he will not intervene in the market unless there is a drastic turn. This market correction is a healthy development for equities. Assets have been on an upward trend for several months now, worrying some economists of an asset price bubble on the horizon.

For now, the economy that Powell's Fed will preside over shows strength and resilience. Powell's most recent comment in a brief video statement announces that "through the Feds decision on monetary policy, they will support continued economic growth, a healthy job market, and price stability." Investors will continue to await the Federal Reserves rate decisions in coming weeks and any inflationary pressures.