Volcker's Tight-Money Policy
Abrupt Shift in Monetary Policy on Oct. 6
When Paul Volcker was sworn in as chairman of the Federal Reserve Board on Aug. 6, there were widespread expectations of shifts in U.S. monetary policy. Volcker, formerly president of the New York Federal Reserve Bank, was known for his conservative views on managing the nation's money supply. He had consistently voted with the minority favoring higher interest rates and tighter money at meetings of the Federal Open Market Committee in the months preceding his appointment. Volcker's appointment was considered a signal to the financial community, both here and abroad, that the Carter administration was ready to fight inflation with the full force of monetary policy.
Two months later, to the day. Volcker began to fulfill ...