The last responsible and competent Fed chairman speaks out.

“Sept. 26 (Bloomberg) — Paul Volcker, who halted a wage and price spiral as Federal Reserve chairman between 1979 and 1987, said he’s worried both about inflation and pressure on the U.S. central bank to not do anything about it.

“I am a little bit more worried about inflation,” said Volcker, 79, speaking at a discussion sponsored by the Women’s Economic Round Table in New York yesterday. Gerald Corrigan, who served as New York Fed president from 1985 to 1993, said he shared Volcker’s concerns.

While the inflation rate isn’t “high” or “running away,” Volcker said, “it is kind of creeping up, and I am impressed by the degree of pressure, if that is the right word — psychological pressure, political pressure — there is not to do anything about it.”

“We live in this peculiar world where 3 percent inflation is stability but a half percent decline in the price index is deflation. I am not quite up with modern nomenclature.”

Volcker’s comments come as the Fed under Chairman Ben S. Bernanke, 52, has held interest rates steady at the past two meetings, a pause that followed 17 consecutive rate hikes since June 2004. Still, inflation has been at or above Bernanke’s own numeric benchmark since April 2004, a sign of the unusual tolerance the central bank has shown toward price increases as it tries to balance a sharp slowdown in housing that risks weakening consumer spending.”