Under the chairmanship of first Paul Volcker (1979–1987) and then Alan Greenspan (1987–2006), the authority of America’s central bank soared to new heights. In terms of its expert authority and unassailable position within the structure of the US government, it came to rival the US security apparatus.41 The irony, however, was that as the Fed’s reputation and authority grew, its key tool of policy seemed to be losing its effectiveness. The short-term interest rate set by the Fed no longer seemed to be setting the pace for the rest of the economy.
