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Former Fed Chief Paul Volcker, inflation tamer, dies

Credit: Reuters - Politics
Published on December 9, 2019 - Duration: 02:11s

Former Fed Chief Paul Volcker, inflation tamer, dies

Former Federal Reserve Chairman Paul Volcker, famed for turning the position of Fed chief into a rock star and for taming crippling inflation in the 1980s, died on Monday.

Conway G.

Gittens has a look back at his career.

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Former Fed Chief Paul Volcker, inflation tamer, dies

Paul Volcker - a towering figure in the history of the U.S. Federal Reserve - died on Monday.

He's credited with leading the Fed into the modern era where the chairman is treated like a rock star on Wall Street and markets hang on every word the central bank leader says, even if those words were difficult to understand.

THEN U.S. PRESIDENT JIMMY CARTER (ENGLISH) SAYING: "I have just announced today that I'm appointing Paul Volcker, a highly-qualified person, internationally respected, as a knowledgeable man on monetary systems on whom I can depend." Volcker was head of the central bank during the turbulent period of the 1980s when there was sky-high inflation and double-digit interest rates.

In order to get inflation under control, Volcker took the very unpopular step of pushing the Fed's key borrowing rate to a historic high of 12 percent.

That did the trick.

Under his watch, inflation nose-dived, from 15 percent all the way down to 3 percent, but, as his critics point out, so did the economy - right into a recession.

But many others credit Volcker with taking the difficult steps that eventually set the stage for steady economic growth and an explosive stock market rally in the 90s.

Never really out of the public view, Volcker was brought in as an advisor to President Obama during the financial crisis.

FORMER FEDERAL RESERVE CHAIRMAN AND OBAMA ADVISOR PAUL VOLCKER (ENGLISH) SAYING: "There are big economic problems behind the financial system too.

They are going to take longer to work out." While others were calling for a break-up of the big banks - Volcker pushed for another option- a rule that would prevent financial institutions from taking risky bets with depositors' money.

That rule, which was later included in the landmark 2010 Wall Street reform law, became known as the Volcker rule.

And Wall Street has been trying to get that rule rolled back ever since.

Volcker was so highly regarded that he was asked to lead several blue-ribbon panels including one that investigated the U.N.

Oil-for-food program and he led a committee of Jewish groups and Swiss banks to a settlement over bank accounts of Holocaust victims. Volcker died at the age of 92.

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