Paul Volcker, inflation-fighting former Fed chairman, dies at 92

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Paul Volcker, who led the Federal Reserve during the Carter and Reagan administrations and was an influential figure in American economic policy for more than 60 years, died on Sunday at the age of 92. Most notably, he led the central bank’s aggressive campaign to lower inflation in the late 1970s and early 1980s.

In his last official job, he was chairman of President Barack Obama’s Economic Recovery Advisory Board, which was formed in response to the 2008 financial meltdown. As Congress debated the landmark Dodd-Frank financial reform law, he helped build the case for new restrictions on bank speculation with deposits insured by the federal government, a regulation subsequently known as the “Volcker Rule.”

However, he is most well-known for his success in ending the high period of inflation after President Jimmy Carter selected him to be the Fed’s chairman in 1979. He had started at the central bank as president of the Federal Reserve Bank of New York in 1975 and then went on to become chairman of the Fed in 1979, a role he held until 1987 under President Ronald Reagan.

As chairman of the Fed, Volcker ended the “Great Inflation” that had afflicted the United States in the late 1960s and 1970s, but only at the cost of a severe recession that saw unemployment rise above 10% at the end of 1982.

He became controversial and unpopular at the time for pushing interest rates as high as 20% to rein in inflation, causing immediate, dramatic drops to investment in the economy. Subsequently, though, the U.S. enjoyed a “Great Moderation” for more than three decades of stable inflation. Volcker eventually came to be known as one of the most successful central bankers in the Fed’s history.

“His life exemplified the highest ideals — integrity, courage, and a commitment to do what was best for all Americans,” said Fed Chairman Jerome Powell.

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