Paul Volcker, the former chairman of the Federal Reserve under Presidents Carter and Reagan who later played a role in the Obama administration’s response to the financial crisis of 2009, has died at the age of 92.
Multiple media outlets reported Monday that Volcker, who served as Fed chairman from 1979 to 1987, had died. The Volcker Alliance, the former chairman’s non-profit group, announced that he died Sunday.
Volcker is known best for using high interest rates to reverse decades of runaway inflation at the cost of a grueling recession. While Volcker was vilified by lawmakers in both parties, as well as farmers, homebuilders and manufacturers hit hardest by higher borrowing costs, he has been credited since for stabilizing the economy after years of rampant price increases.
“His life exemplified the highest ideals–integrity, courage, and a commitment to do what was best for all Americans,” Fed Chairman Jerome Powell said in a Monday statement. “His contributions to the nation left a lasting legacy.”
Two decades after Volcker left the Fed, he joined the Obama administration to help shape its response to the 2007-8 financial crisis and recession. That response led to the 2010 Dodd-Frank Wall Street reform law.
Volcker chaired former President Obama’s economic recovery advisory board and advocated for stricter limits on risky investment practices that led to the 2007 panic.
Volcker advocated for a provision of Dodd-Frank that banned banks from using their own capital to make high-risk bets. That rule, known as the “Volcker Rule,” was among the financial industry’s chief concerns with Dodd-Frank and was formally loosened earlier this year by Trump-appointed regulators.
Volcker, a Democrat, played crucial roles in economic policy for several presidents in both parties, defining administrations and the trajectory of the U.S. economy for decades to come. He served in the Treasury Department during the Kennedy, Johnson and Nixon administrations, shaping the U.S.’s response to a deteriorating global financial order.
As Treasury undersecretary for international affairs, Volcker was a driving force behind Nixon’s decision to abandon the gold standard, which tied the U.S. dollar to a fixed amount of gold. Carter’s appointment of Volcker to the Fed and the economic crunch to follow likely played a role in his defeat to Reagan, who nonetheless renominated Volcker in 1983.
Volcker’s public gradually improved along with the economy, and his Fed tenure led to an era of largely stable growth with mild recessions until the 2007 financial crisis. He faced perhaps more political scrutiny than any other Fed chief until current chairman, Powell, invoked Trump’s wrath soon after taking office in 2018.
After leaving the Obama administration, Volcker focused his work on bolster the effectiveness and standing of policymakers and government officials. He founded in 2013 the Volcker Alliance, a non-profit group advocating for non-partisan efforts to improve governance, and released a memoir this year entitled “Keeping At It: The Quest for Sound Money and Good Government.”
Volcker warned in August that the U.S. is “developing into a plutocracy,” asserting that the country was “in a hell of a mess in every direction.”
“Distrust and ill-will permeate attitudes toward government,” Volcker wrote in his memoir.
“Too many of the best in the assailed bureaucracy, both in Congress and in key administrative posts, have left too soon, doubting that their voices could be heard or that their goals could be achieved. That needs to change. And it won’t be easy.”
This developing story was updated at 12:01 p.m.