Fed Chairman praises Paul Volcker’s firmness in the face of pressure

Federal Reserve (Fed) Chairman Jerome Powell yesterday praised former central bank Chairman Paul Volcker’s willingness to resist political pressure during his fight against inflation in the 1980s.

Powell has insisted on defending the independence of the Fed despite demands from US President Donald Trump to lower interest rates.

Volcker ignored his critics and sharply raised interest rates in the early 1980s, causing a recession but also returning price stability to the U.S. economy.

“Their actions remind us that independence and integrity are inseparable: we need independence to do the right thing, and we need integrity to use that independence wisely,” Powell said in a video accepting the Paul A. Volcker Award for Public Integrity.

Over the past year, Trump has frequently condemned Powell for failing to ease monetary policy and threatened to fire him.

In January, the Justice Department launched an investigation into the Fed chairman for alleged irregularities in the remodeling of the Fed’s headquarters in Washington, a move that Powell says is an attempt to intimidate him into bending to the chairman’s wishes.