Federal Reserve Chair Jerome Powell sent a clear message to financial markets this week: Interest rates will remain high until inflation goes low and stays low.
Powell’s message was delivered in a concise, direct speech at the Jackson Hole economic symposium on Friday, the year’s premier gathering of global central bankers. Stocks tanked in response to Powell’s remarks, suggesting investors got the message.
But Powell did not approach the podium at the Jackson Lake Lodge alone on Friday — the Fed chair brought with him the spirit and the lessons of the late Paul Volcker.
Volcker, who died in December 2019, served as Fed chair from 1979 until 1987. His tenure is remembered for one crowning achievement: breaking the back of inflation that plagued the U.S. economy through the 1970s and into the early ’80s.
These efforts, however, did not progress in a straight line.
Chairman of the Federal Reserve Board, Paul Volcker, stands with hands on hips and smokes a cigar during a meeting in…