How Paul Volcker Ended The Great Inflation in 1980s

by | Oct 9, 2022 | Invest During Inflation | 8 comments

How Paul Volcker Ended The Great Inflation in 1980s




The inflation will end if the US Feds implement the Paul Volcker Strategy. 🔴 ➡️

🔴 ➡️

⬇️Timestamps:
0:00 → Inflation is Not Transitory
1:43 → Who is Paul Volcker?
3:10 → Paul Volcker’s Strategy Breakdown
6:15 → Conclusion

Inflation has accelerated further in recent months, with prices rising 8.6% from May last year, making it the fastest increase since December 1981.

Federal Reserve Chairman Jerome Powell warned that getting inflation under control could cause some economic pain but remains his top priority, and that he couldn’t promise a so-called soft landing for the economy as the Fed raises interest rates to tamp down price increases running near their fastest pace in more than 40 years. With a tight labor market pushing up wages, avoiding a recession that often follows aggressive policy tightening will be a challenge.

Recalling back in March 1980, Paul Volcker fought greater than 10% annual inflation rates with contractionary monetary policy and courageously raised the fed funds rate to 20%. He briefly lowered it in June. When inflation returned, Volcker raised the rate back to 20% in December and kept it above 16% until May 1981.3 That extreme and prolonged interest rate rise was called the Volcker Shock. It did end inflation. Unfortunately, it also created the 1981 recession.

Desperate times call for desperate measures – will Jerome Powell choose to implement Paul Volcker’s strategy to end inflation once and for all?

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Disclaimer: The content on this channel is for educational purposes only and merely cites my own personal opinions. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary….(read more)


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8 Comments

  1. Christophe Lirola

    This is very comprehensive and I agree 100%. We need to get inflation under control

  2. Mary Fitzpatrick

    Raise those interest rates!!!! Get this under control already!!!!

  3. Christopher Gan

    Looks like we're headed for Volcker's direction. Fed is going to raise interest rates again very aggressively until inflation cool down

  4. S Nair

    Hi Zeit, tq for your content. Perhaps a Video on how best to invest or safe to minimize the effects of high inflation / low growth environment.

  5. Christopher Gan

    Good analysis, keep up the good work!

  6. Maks Nechesonov

    Please, call the Ukraine-Russia war as war. It's not a "conflict". It's real war.

  7. EC T

    My parents told me during 80s bank interest was 10%.

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