The Iran and Volcker Recession (jan 1, 1980 – jul 1, 1980)
Description:
Duration: Six monthsGDP decline: 2.2%
Peak unemployment rate: 7.8%
Reasons and causes:
Accommodative monetary policy aimed at alleviating rising unemployment pushed U.S. inflation to 7% by early 1979, just before the Iranian Revolution caused oil prices to double.32 The Federal Reserve was already raising rates when Paul Volcker was named Fed chair in August 1979, and the rate went from 10.5% at the time of his appointment to 17.5% by April 1980.33 This short recession formally ended as the Fed dropped the fed funds rate back down to 9.5% by August of 1980, but inflation stayed high and the Volcker Fed wasn't done.
Added to timeline:
Date:
jan 1, 1980
jul 1, 1980
~ 6 months