Who Are the Major Players in the Battle Against Inflation?
 Federal Reserve Chairs Janet Yellen, Paul Volker, Alan Greenspan and Ben Bernanke.){kind=link}
The most influential players in the fight against inflation are the Chairmen of the Board of Governors of the Federal Reserve System. However, the challenges they've faced, and the tools they've used, have been very different.
Paul Volcker (1979-1987): Inherited stagflation from the Nixon Presidency. Fought 10% annual inflation rates by raising the Fed funds to 20% and keeping it there until inflation was in check.
Unfortunately, it created the recession of 1981. Volcker took this dramatic and consistent action to get everyone to believe that inflation could actually be tamed. From this experience, the Fed realized that expectation of inflation, and forward guidance, were just as powerful tools as the Fed funds rate.
Alan Greenspan (1987-2006): Advocated laissez-faire economics, where the Fed doesn't try to micromanage the economy, but instead sticks to broad goals of stimulating the economy while avoiding inflation. He relied primarily on the Fed funds rate to achieve his goals.
Ben Bernanke: (2006 - 2014): Introduced use of inflation targets as a way of setting public expectations of Fed actions. Fed Governor from 2002-June 2005, when he became the Chairman of the President's Council of Economic Advisors. Professor of Economics at Princeton from 1985-2002, including two terms as department chair. His expertise was in the role of the Fed and monetary policy in the Depression. Created many new tools to combat the 2008 financial crisis.
For a list and explanation of these, see Fed's Other Tools.
Janet Yellen: (2014 - 2018): Understands the importance of clear forward guidance in managing expectations of inflation. She started her tenure by tapering the Fed's purchases of Treasuries as she winds down Quantitative Easing. Article updated February 21, 2014.
Inflation FAQ
- What is Inflation?
- How Does Inflation Impact My Life?
- Why Hasn't Inflation Been a Concern Until Now?
- Who Are the Major Players in the Battle Against Inflation?
- What Is Being Done to Control Inflation?
- How Can I Protect Myself From Inflation?
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