Volcker's Fed (1979–1981(
Paul Volcker, Federal Reserve chair, pushed the federal funds rate from aboutro 10% toover 20% in 1980, willing to accept deep recession to break double-digit inflation. Unemployment topped 10%.
The US economy fell into recession in 1980–82; unemployment exceeded 10%.
Inflation dropped to around 3%, establishing the Fed's inflation-fighting credibility for decades.
BOJ's aggressive pace—fastest since 1990—echoes Volcker's willingness to accept economic pain to break inflation. It shows both the potential payoff and the recessionary risks.
