jan 1, 1979 - US President Jimmy Carter appoints Paul Volcker at head of the Fed

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Jimmy Carter appointed Paul Volcker as head of the Federal Reserve.
Volcker was well-liked among the international finance community and strongly believed in free movement of goods and capital, while strongly opposing inflation and budget deficits.
In the beginning, Volcker was committed to bringing the raging inflation down, he succeeded by raising interest rates from 10% to 20% and keeping them there for three years, despite two successive recessions and raised unemployment (11%).
When he was first appointed the real short-interest rates were almost or close to zero (making borrowing basically free), but with the Fed doubling the interest rates the real short-term interest rates were pushed at 10%.
This made it hard for firms to borrow money and thus they had to economize, most of them cutting wages or jobs.
In fact, the real wages of American workers did not start to grow until a decade later.

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