General World News

Tough Calls: Lessons from Volcker, inflation, and the Fed’s crossroads

“The standard of living of the average American has to decline,” he said. “I don’t think you can escape  that.” These were the words of Federal Reserve Chairman Paul Volcker as he testified before Congress in October 1979. Inflation was 13%. Volcker’s predecessors, Arthur Burns and William Miller, had  failed to control prices. Stagflation gripped the United States. We were in an economic death spiral.  

Volcker would go on to raise the Fed Funds Rate to 20% in 1981, forcing the country into a deep recession. The 30-year fixed hit 18% in October of the same year and unemployment surpassed 10% details ⇒

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