Washington (AFP)

Paul Volcker was a historical figure in finance, credited with taming inflation at the head of the US Central Bank (Fed) in the 1980s. He died Sunday at the age of 92 years.

A De Gaulle-like figure, a deadpan humor, Paul Volcker has spent his long career as a banker and a great government clerk as an artist of monetary policy, endowed with fierce independence.

Paradoxically, it disappears while inflation, its enemy forever, has faded from the economic landscape in the United States to the point of disconcerting economists.

Volcker, who had been treated for prostate cancer, died at his home in Manhattan, his daughter told AFP.

Current Fed boss Jerome Powell said he was "deeply saddened" by the death of Paul Volcker "who believed there was no higher function than public service." "His life exemplified the highest ideals: integrity, courage and commitment to do what is best for all Americans," he wrote in a statement.

"His contributions to the nation leave a lasting legacy," said Powell.

Mr. Volcker, a Democrat, served many American presidents, from Richard Nixon in 1971 when he was at the Treasury where he concocted the American abandonment of the gold standard, to Barack Obama in 2008, in the midst of the financial crisis, where he advocates for greater supervision of banks.

But it was as president of the Federal Reserve from 1979 to 1987, under Jimmy Carter and under the Republican Ronald Reagan, that he left his mark, sometimes painful and earned the respect of economists around the world.

Former President Jimmy Carter was one of the first to respond to the announcement of his death: "Rosalynn and I are deeply saddened to learn of the passing of Paul Volcker, whose economic acumen has made him a giant of the public service. Paul was as stubborn as he was big, and even though some of his policies as Fed chairman were politically expensive, it was the right thing to do, "he wrote in a statement. on Monday.

Even Donald Trump, then a White House candidate, had this comment about the one seen in the 1980s as Washington's 2nd most important man: "I really like Paul Volcker. very solid in his policy and attitude ".

- Bitter potion -

In 1978, at the height of the oil crisis, the US economy was swamped by galloping inflation.

Jimmy Carter Names 51-Year-Old Economist - New York Fed President - Head of World's Most Powerful Central Bank, Against Multiple Advisors' Warning That "Bitter Potion" "advocated by his candidate will mortgage his reelection.

Inflation, which Volcker defined as "too much money running after too few goods," then runs at an annual rate of 13 percent. To curb it will raise interest rates from 11% to 20%. For comparison they are at 1.75% today and inflation around 2%.

This harsh turn of the screw will not be painless and will be accompanied by a recession, which will earn him fierce attacks. Car dealers send him car keys in coffins, strangled debt farmers encircle the headquarters of the central bank of their tractors.

But this pragmatic and stubborn intellectual does not give in: "nothing stimulates him intellectually more than a crisis," said his wife Barbara.

- The Volcker Rule -

This inflexible policy pays, inflation goes from 14% in 1980 to 3% in 1983, but it will also cost, with the crisis of hostages of the American embassy in Iran, his re-election to Jimmy Carter.

Paul Volcker leaves the Fed in 1987 but returns to the front of the politico-economic scene in 2008 as an adviser to Barack Obama in the midst of the financial crisis.

Very critical of the risky activities of the banks and the high salaries of their leaders, he will propose the "Volcker rule", which prohibits the speculation of banks for their own account.

These provisions have lost their substance under the deregulation efforts of the Trump administration.

This grandson of German immigrants, born in 1927 in Cape May, New Jersey, a fly fishing enthusiast, was educated at Princeton and Harvard.

A father of two, including a son with cerebral palsy, he remarried in 2010, at the age of 83, with his long-time assistant, after the death of his wife Barbara twelve years ago.

With a very frugal lifestyle, Paul Volcker was not focused on enrichment. In 1981, he let his daughter go into debt to buy a house while real estate rates are at 15%.

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