NEW YORK—Paul Volcker is a living financial legend. As a chairman of the Federal Reserve in the early ′80s, he was singlehandedly responsible for quashing stagflation by raising interest rates to an unheard of 20 percent by June 1981.
What ensued was an unprecedented economic expansion and bull market in stocks, which was only seriously stopped by the Internet bust in 1999, caused by the lax monetary policy of Volcker’s successor Alan Greenspan.
As part of a meeting of the Committee for Monetary Research and Education, Volcker (88) gave us rare insights into his story, the working of the Fed, and current financial issues at the University Club in New York, on March 25.
Volcker served under both Democratic and Republican presidents but got along well with both.
“When I became chairman, we had pretty bad inflation. President Carter was under some pressure. He recognized inflation was a big problem and something had to be done about it,” he said.
