"But his cunning overreached his aim; his words touched too deep, and awoke a fire more fierce than he designed; and FŽanor looked upon Melkor with eyes that burned through his fair semblance and pierced the cloaks of his mind, perceiving there his fierce lust for the Silmarils. Then hate overcame FŽanor's fear, and he cursed Melkor and bade him be gone, saying: 'Get thee gone from my gate, thou jail-crow of Mandos!' And he shut the doors of his house in the face of the mightiest of all the dwellers in Eš."
There are more of course, though most from the Silmarillion call him the most powerful Ainur rather than being.
From Morgoth's Ring:
"Melkor must be made far more powerful in original nature (cf. 'Finrod and Andreth'). The greatest power under Eru (sc. the greatest created power).(1) (He was to make I devise I begin; Manwe (a little less great) was to improve, carry out, complete.) Later, he must not be able to be controlled or 'chained' by all the Valar combined. Note that in the early age of Arda he was alone able to drive the Valar out of Middle-earth into retreat."
Melkor is the most powerful being in the setting under Eru Illuvitar in the sense that he was the one who could assert his will over the world beyond all other Ainur. His reality warping singing powers were unrivaled.
But Tulkas still easily beat the shit out of him in a fist fight because Melkor is a huge pussy, and Tulkas is the best man-fighter in existence.
Depends what you mean with powerful. Most powerful when it comes to willpower would be Bilbo, after having the Ring for 60 years and still left it for Gandalf... that is insane if you think about Gollum before Bilbo or Frodo at the End of LotR.
Physically it will be Merry and Pippin, the ent draught made them bigger and stronger.