Volcker's Fed raises rates toward 20% to break inflation over political objections

On October 6, 1979, Federal Reserve Chair Paul Volcker convened a Saturday emergency meeting of the Federal Open Market Committee and announced a new anti-inflation framework that would allow interest rates to rise as high as necessary to control money supply growth. The federal funds rate climbed to a peak of 19.1% by June 1981, triggering two recessions and 10.8% unemployment. Volcker acted despite fierce political pressure from Congress and the Carter and Reagan administrations, establishing the modern norm that the Fed would bear short-term pain to achieve price stability.