Paul Volcker

Paul Volcker served as Federal Reserve Chairman from 1979 to 1987. He was appointed by President Carter and reappointed by Reagan to address the stagflation of the 1970s — simultaneous high inflation and high unemployment. Volcker raised the federal funds rate to unprecedented levels, peaking near 20% in 1981. This caused the worst recession since the Great Depression and massive unemployment, but it decisively broke the inflationary expectations that had been embedded in the economy. His actions restored Fed credibility and established the template for modern inflation-targeting central banking. Later, after the 2008 financial crisis, he advocated the "Volcker Rule" to prohibit banks from proprietary trading. He also chaired President Obama's Economic Recovery Advisory Board. Before the Federal Reserve, he served as Under Secretary of the Treasury for International Monetary Affairs, where he participated in the collapse of the Bretton Woods fixed exchange rate system in 1971. He passed away in December 2019. His legacy is widely regarded as the most decisive and consequential monetary policy intervention in modern US economic history.