Dec 10, 2019

What Jerome Powell learned from Paul Volcker

Paul Volcker. Photo: Monica Schipper/Getty Images

Former Fed chair Paul Volcker died Sunday at 92 years old, it was announced yesterday. It reminded me of comments current Fed chair Jerome Powell made about him at the National Association for Business Economics conference in October.

Powell said of Volcker: "I don’t think there has been a greater public servant in our lifetimes."

The big picture: Volcker is best known for having the will to drive the U.S. into a recession in order to battle inflation, which he called "the cruelest tax" because of the pernicious way it could hurt the nation's poor and elderly.

  • He served in the Treasury Department under Presidents Kennedy, Johnson and Nixon before moving to the Fed.

Background: Powell said he first met Volcker when he was an assistant at the Treasury Department in the early 1990s and that Volcker, despite Powell's then-minimal profile, "couldn’t have been nicer and more interested in helping me and supporting me. He was a great person to know."

  • Since leaving the Fed, Volcker made a point to speak out against corporate greed and on behalf of reining in excesses on Wall Street.
  • He was a strong advocate for common-sense reforms and regulations that benefited regular people at the expense of big business and profits.

Where it stands: After being named Fed chair, Powell was seen numerous times with Volcker's memoir, “Keeping at It: The Quest for Sound Money and Good Government.”

  • "I actually thought I should buy 500 copies of his book and just hand them out at the Fed. I didn’t do that. But it’s a book I strongly recommend, and we can all hope to live up to some part of who he is."

Go deeper: Former Fed chairman Paul Volcker dies at 92

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The last of the heroic technocrats

Felix Rohatyn (l) and Paul Volcker. Illustration: Aïda Amer/Axios. Photos: Wally McNamee/Getty Contributor and Ted Thai/Getty Contributor

Two giants of the postwar economic landscape died last week. The actions of Paul Volcker (1927–2019) and Felix Rohatyn (1928–2019) had profound effects on millions of Americans, and bestowed stellar reputations on both men.

Why it matters: There are, and will be, many other successful and powerful technocrats, many of them just as capable as these two paragons of austerity. But none of them are likely to receive the kind of popular acclaim that Volcker and Rohatyn enjoyed.

Go deeperArrowDec 19, 2019

Federal Reserve keeps interest rates unchanged

Fed chair Jerome Powell at a news conference in October. Photo: Eric Baradat/AFP via Getty Images

The Federal Reserve said Wednesday that it would keep the benchmark interest rate at its current range of 1.5%-1.75%, a widely expected decision that ends the Fed's rate-cutting streak.

Why it matters: The central bank is confident the economy doesn't need easier borrowing conditions to stay afloat and signaled no further cuts through the 2020 presidential election, though uncertainties like the U.S.-China trade war remain. Wednesday's decision comes despite President Trump's continued push to goad the Fed to further trim rates.

Go deeperArrowDec 11, 2019

The Fed's statement is a bit of a head-scratcher

Screenshot of the Fed's dot plot

Wednesday's Federal Open Market Committee meeting was largely a non-event, with the Fed holding U.S. interest rates steady as expected by nearly 100% of the market.

Between the lines: However, the Fed's statement and predictions for future policy left many confused.

Go deeperArrowDec 12, 2019