Key Appointments & Policy Shifts - Paul Volcker nominated to lead the US Federal Reserve by President Jimmy Carter on July 25th, 1979 [1] - Volcker's appointment followed Carter's economic malaise speech and a cabinet reshuffle [2] - Volcker known for advocating monetary restraint while heading the Fed's regional bank in New York [2] Economic Challenges & Responses - Consumer inflation had doubled to 11% prior to Volcker's appointment [2] - Volcker lamented pervasive uncertainty about the price level [3] - The Fed, under Volcker, lifted rates a full percentage point to 12% on October 6th, 1979, focusing on limiting money supply growth [4] - Fed rates eventually pushed above 20% [4] Economic Impact & Political Pressure - President Carter lost reelection largely due to economic pain caused by rate hikes [5] - Ronald Reagan tried to influence Volcker to be more dovish due to recessions, a 10% jobless rate, and soaring loan defaults [5] - Congress introduced legislation requiring the Fed to cut rates, but the bill failed [5] Economic Recovery & Legacy - Inflation plunged from 15% in 1980 to under 4% by 1983 [6] - Refocus on money supply helped lay the foundation for the global economic boom of the 1980s and 90s [6]