How the Fed has — and hasn't — responded to previous oil price shocks

During the 1979 Iranian revolution, crude prices more than doubled from $14 to over $35 by early 1981. Under then-Chair Paul Volcker, the Fed aggressively fought inflation. Volcker prioritized tackling inflation, even at the cost of a recession, and the Fed raised the rates to a peak of 20% in 1980.Before the energy crisis, the Fed had been raising rates to combat inflation in the first half of 1973 but shifted its focus later that year as the economy weakened. As inflation picked up, Burns and the Fed swit ...