New York —  US Federal Reserve chair Jerome Powell has called low inflation the great problem of our time, but it wasn’t always so. Paul Volcker, the legendary Fed chief who died on Sunday, will be remembered for the extraordinary interest rates he imposed to vanquish high inflation four decades ago.

Inflation averaged 7.1% in the 1970s, more than double the previous decade’s level, and mortgage rates — the most important borrowing costs for American households — were above that level for most of those years. The soaring cost of living was a national preoccupation, so president Jimmy Carter called in “Tall Paul”...

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