Incoming Federal Reserve Chairman Jerome Powell has been dealt a good hand as he takes the helm of the nation's central bank, a most powerful force influencing interest rates.

Outgoing chair Janet Yellen steps away after a four-year period of slow growth and modest economic prosperity for much of the country. The economy is expanding, employment is full and markets are way up.

What happens next will test the new chairman's acumen and color the legacy of his predecessor.

A career economist and central banker, Yellen brought a dovish, predictable influence to the Fed. President Obama appointed her in 2014 to succeed Ben Bernanke, whose aggressive action in 2008 and 2009 had spared the country a depression but left the Federal Reserve with an enormous balance sheet and interest rates at historic lows.

Yellen's task was to somehow encourage more economic growth while unwinding Bernanke's crisis-time policies. She needed to normalize interest rates and the Fed's balance sheet while also stoking the economy.

Slow growth, however, prevented her from moving with any haste. Instead, she opted for accommodating policies that pleased markets and kept rates low, even though it meant putting off rate hikes and balance sheet reductions. In the late stages of her term, she finally led the central bank to begin selling some of the bonds that had ballooned its balance sheet. Interest rates increased just four times under her watch, each time a telegraphed incremental increase. A fifth hike is now almost certain in December.

The results have been pleasing for many parts of the economy. The stock market sets new highs regularly. Jobs are plenty. And economic growth, while moderate, has improved.

Such is the past and present. But what's to come?

New Fed Chair Powell will enjoy the healthy state Yellen leaves behind. So far, both his record and his confirmation hearing testimony indicate he will follow a similar script as Yellen. He is not an economist as Yellen — Powell is a private-equity banker and businessman — but his time as Fed governor has prepared him well for the new role.

The big question on everyone's mind remains inflation. For all of Yellen's success in keeping rates low and stoking economic growth, her predictions of a turn towards higher inflation have failed to come true. At a time when prices and wages should be rising at a more rapid pace, they simply aren't. It's created a conundrum for central bankers who would prefer to unwind the Fed's balance sheet and normalize rates in tandem with rising inflation. The two forces would work together to bring balance to the economy.

Stagnant inflation, or stagflation, remains one of Powell's greatest unknowns. Will inflation rise next year as economic growth seems poised to continue, giving him the window to complete what Yellen started? Will he be able to normalize still-low rates if inflation doesn't materialize? How will the Fed respond when this period of economic expansion finally runs out of steam?

Those yet-to-comes will likely be faced by Powell. Both he and his predecessor share a patient, accommodating approach to these issues. Let's hope they're equally successful.

Economic news this week

• Big surprise on Monday as the Commerce Department said new home sales increased 6.2 percent in October, reaching heights not seen since October 2007. New home sales have now increased for three straight months.
• Pending home sales in September dropped to their lowest level since January 2015 as low inventory continues to crimp the sale of homes, according to the National Association of Realtors. Analysts blame some of the results on hurricanes in Florida and Texas, too.
• Mortgage applications decreased 3.1 percent last week as a decline in refinances continued to drag down overall volume, according to the Mortgage Bankers Association.
• Consumer confidence hit a 17-year high this week as the November Consumer Confidence Index report showed Americans headed into the holiday shopping season in good spirits about the economy.
• The number of Americans applying for unemployment fell again this week, showing the strength of the job market.
• Bond markets and mortgage rates continued the bearish trend into Friday morning, but right before blog publish time, news broke that former National Security Adviser Michael Flynn planned to testify that President Trump, during his 2016 campaign, had directed him to make contact with the Russians. As a result, it was a very volatile morning in both equities and bonds. Bonds came off their intraday high of 2.39, down to 2.33 at midday Friday. Equities fell as much as 300 points on the news. Expect the coming days and weeks to be somewhat volatile until we have more clarity on the issues.