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Volcker's Announcement of Anti-Inflation Measures

Explore the Federal Reserve's history

Since the late 1960s, the nation had experienced a trend of rising prices as inflation began creeping upward from annual rates that were previously less than 2 percent for several years. Volcker had warned that such an outcome was possible soon after the October 6, 1979, FOMC meeting, telling an ABC News program that “some difficult adjustments may lie ahead,” (Federal Reserve Bank of St. Louis 1979b). By breaking with traditional operating procedures, and persevering despite a recession that was quite large by historical standards, the Fed re-established credibility for low inflation (Goodfriend and King 2005).

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