# The Volcker Mistake **URL:** \ **Category:** Macro Economic Trends and Risks\ **Created:** [December 23, 2022, 10:22pm UTC](https://discussion.fool.com/t/the-volcker-mistake/85027 "2022-12-23T22:22:25Z")\ **Posts on this page:** 1\ **Showing post:** 2
**Author:** ![38Packard](https://sea2.discourse-cdn.com/motleyfoolfree/user_avatar/discussion.fool.com/38packard/32/13738_2.png) [@38Packard](https://discussion.fool.com/u/38Packard)\ **Post date:** [December 24, 2022, 12:44am UTC](https://discussion.fool.com/t/the-volcker-mistake/85027/2 "2022-12-24T00:44:58Z")
This is what Wikipedia has to say about his legacy as Chairman of the Federal Reserve: > **[Paul Volcker](https://en.wikipedia.org/wiki/Paul_Volcker)** > > Paul Adolph Volcker Jr. (September 5, 1927 – December 8, 2019) was an American economist who served as the 12th chairman of the Federal Reserve from 1979 to 1987. During his tenure as chairman, Volcker was widely credited with having ended the high levels of inflation seen in the United States throughout the 1970s and early 1980s.\[citation needed\] He previously served as the president of the Federal Reserve Bank of New York from 1975 to 1979. > President Jimmy Carter nominated him to succeed G. ... _After [G. William Miller](https://en.wikipedia.org/wiki/G._William_Miller)’s confirmation as Secretary of the Treasury, President [Jimmy Carter](https://en.wikipedia.org/wiki/Jimmy_Carter)’s confirmation of Vice Chairman of the Federal Reserve [Frederick H. Schultz](https://en.wikipedia.org/wiki/Frederick_H._Schultz)’s role as Acting Chairman sent markets panicking. Carter resultingly sought a reassuring, qualified nominee who would confront inflation head-on, and nominated Paul Volcker to serve as chairman of the [Board of Governors of the Federal Reserve System](https://en.wikipedia.org/wiki/Board_of_Governors_of_the_Federal_Reserve_System) on July 25, 1979.[[16]](https://en.wikipedia.org/wiki/Paul_Volker#cite_note-16)[[17]](https://en.wikipedia.org/wiki/Paul_Volker#cite_note-17) He was confirmed by the U.S. Senate on August 2, 1979, and took office on August 6, 1979.[[18]](https://en.wikipedia.org/wiki/Paul_Volker#cite_note-18) President [Ronald Reagan](https://en.wikipedia.org/wiki/Ronald_Reagan) renominated Volcker to a second term in 1983.[[19]](https://en.wikipedia.org/wiki/Paul_Volker#cite_note-19)[[20]](https://en.wikipedia.org/wiki/Paul_Volker#cite_note-20)_ _Inflation emerged as an economic and political challenge in the United States during the 1970s. The [monetary policies](https://en.wikipedia.org/wiki/Monetary_policy) of the Federal Reserve board, led by Volcker, were widely credited with curbing the rate of [inflation](https://en.wikipedia.org/wiki/Inflation) and expectations that inflation would continue. US inflation, which peaked at 14.8 percent in March 1980, fell below 3 percent by 1983.[[21]](https://en.wikipedia.org/wiki/Paul_Volker#cite_note-21)[[22]](https://en.wikipedia.org/wiki/Paul_Volker#cite_note-22) The Federal Reserve board led by Volcker raised the [federal funds rate](https://en.wikipedia.org/wiki/Federal_funds_rate), which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The [prime rate](https://en.wikipedia.org/wiki/Prime_rate) rose to 21.5% in 1981 as well, which helped lead to the [1980–1982 recession](https://en.wikipedia.org/wiki/Early_1980s_recession_in_the_United_States),[[23]](https://en.wikipedia.org/wiki/Paul_Volker#cite_note-23) in which the national [unemployment rate](https://en.wikipedia.org/wiki/Unemployment_in_the_United_States) rose to over 10%. Volcker’s Federal Reserve board elicited the strongest political attacks and most widespread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of high interest rates on the construction, farming, and industrial sectors, culminating in indebted farmers driving their tractors onto C Street NW in [Washington, D.C.](https://en.wikipedia.org/wiki/Washington,_D.C.) and blockading the [Eccles Building](https://en.wikipedia.org/wiki/Eccles_Building).[[24]](https://en.wikipedia.org/wiki/Paul_Volker#cite_note-24) [US monetary policy](https://en.wikipedia.org/wiki/Monetary_policy_of_the_United_States) eased in 1982, helping lead to a resumption of economic growth._ '38Packard --- _[View the full topic](https://discussion.fool.com/t/the-volcker-mistake/85027)._