For most Americans, the Federal Reserve System, a mysterious world of money supply and discount rates, and the policies of its chairman, Paul Volcker, seem somewhat removed from everyday life. As TIME'S cover story this week makes clear, however, "Volckernomics," the Federal Reserve's anti-inflation policy, has resulted in unpredictable interest rates that affect everyone. Explaining the intricacies of monetary policy has been part of the job of Washington Correspondent David Beckwith, who helps report national economics for TIME. Says Beckwith: "Economics, Reaganomics and Volckernomics are to the early 1980s what Watergate was to the early 1970s--the biggest continuing story in Washington." Dealing with Volcker has posed a unique problem for Beckwith: "He is the first person I have covered in 15 years of journalism that I literally have had to look up to. At 6 ft. 7 1/2 in., he tops me by an inch and a half. Volcker also likes to joke about his height. 'You're just a short guard,' he chided me recently. 'I'm a power forward.' "

The reporters who worked on the story across the country were well aware that this was a subject that mattered to every body--including them. Correspondent BJ. Phillips, newly arrived in Atlanta from New York City and in need of a car, took a look at costs and opted for a new engine and paint job for the 1951 Ford that once belonged to her grandfather. Chicago's Gary Ruderman signed closing papers on a 60-year-old gingerbread frame house last week. Avoiding the lofty loan rates of local banks, Ruderman financed the house with the aid of a 5% mortgage from the seller. Says Ruderman: "The basement leaks and the porch is collapsing, but it's ours."

The cover story was written by Senior Writer George Church, with the assistance of Reporter-Researchers Mary Earle and Bernard Baumohl. Church, a suburban homeowner since 1963, had been thinking about moving back to New York City, but high mortgages and urban real estate prices have quashed that notion. "I guess I'll be a weekend gardener a few more years," he says.

Only Associate Editor Christopher Byron, who edited the cover, had a good word to say about high rates: "They have turned me from a spender into a saver," he says. "If you can get 14% or even 15% on your money at a bank, why buy an Oriental rug or a Krugerrand?"

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