The Gulf War Recession (jul 1, 1990 – mar 1, 1991)

Description:

Duration: Eight months
GDP decline: 1.5%
Peak unemployment rate: 6.8%
Reasons and causes:

This relatively mild recession began a month before Iraq invaded Kuwait, and the resulting oil price shock may have contributed to a frustratingly lackluster recovery. The Fed had raised the federal funds rate from 6.5% in February 1988 to 9.75% in May 1989 in an effort to contain inflation, which rose from 2.2% in 1986 to 3.9% for 1990.

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