23, 1973 file photo, cars line up in two directions at a gas station in New York City. On the popular sitcom All In The Family, Archie Bunker was reduced to eating meatless spaghetti.ĪSSOCIATED PRESS In this Dec. The 1970s were bookended by oil shocks that brought soaring prices for gasoline. Now, Powell is determined to snuff out inflation with higher interest rates and avoid the kind of decade-long price spiral that haunted presidents from Richard Nixon to Jimmy Carter. Instead, prices have continued their rapid climb for a year and a half. They believed it was the temporary product of supply shocks tied to the pandemic and pent-up demand from consumers and that prices would quickly settle down again. Yellen and Powell initially misjudged the staying power of inflation. "I came of age and studied economics in the 1970s and I remember what that terrible period was like," Treasury Secretary Janet Yellen told a House subcommittee last year. It's a lesson born of the country's painful experience with runaway prices in the 1970s, when Americans sported "Whip Inflation Now" buttons on their wide lapels. "The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched," Fed chairman Jerome Powell said last week.
economy.īut the Fed is doing it in the hopes of dousing high inflation, before it ignites a long-smoldering dumpster fire.
The Federal Reserve is being blamed for pouring a lot of cold water on the U.S.
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