Word: feds
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Dates: during 1980-1989
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Reagan began briskly. Said he: "I understand from Howard that you don't want to be reappointed." When Volcker concurred, the President started to ask the Fed chairman to think yet again. But he was interrupted by Volcker, who pulled his letter of resignation from a pocket and began to summarize its contents. As President Reagan heard that some of Volcker's reasons were personal, he declared, "I've got a policy that I never try to talk anyone out of leaving Government for personal reasons." All four men then discussed Volcker's successor and, with the Fed chairman...
...markets adjusted to the shock of Volcker's impending absence, a new Fed- watching game had already begun. Every recent utterance by Greenspan was being scanned for inklings of his current views on inflation, interest rates and the dollar's value. By and large, Greenspan kept mum in anticipation of his Senate confirmation hearings in mid-July...
Indeed, some Fed watchers think Greenspan may become more influential than Volcker has been, at least recently. Says Robert Hormats, a vice president of the Goldman Sachs investment firm and an economic adviser in four Administrations: "The markets have made a mistake if they think the White House may have more influence on the Fed. It will be the other way around." Hormats' reasoning: Volcker's commanding manner and banker's jargon may have been off-putting to Reagan. Greenspan, on the other hand, has a gift for rendering economic concepts in the kind of uncomplicated language beloved...
...most accounts, Volcker ranks as the best-known chairman in the Fed's history. His bald pate and halo of cigar smoke became a familiar sight on magazine covers and TV screens, while his name frequently cropped up in everyday household discussions of mortgage rates and car loans. Overseas, his willingness to involve his agency in other countries' economic concerns earned the U.S. large amounts of economic goodwill. Even bankers like former Citicorp Chairman Walter Wriston, who tangled with Volcker on many issues, admired the Fed chief's willingness to do the dirty work of wringing inflation...
...need for Volcker's brand of inflation fighting arose during the aftermath of two oil shocks, which had sent prices zooming out of control by 1979. G. William Miller, who had served only 17 months as Fed chief, was proving ineffective against the growing crisis. Suddenly one day in July, while Treasury Under Secretary Anthony Solomon was cooling off in his backyard pool, he got an urgent phone call from President Jimmy Carter, who wanted suggestions for a new Fed boss. "Paul Volcker," Solomon replied with little hesitation. "Who's that?" Carter asked, not recognizing the name of the head...