On October 6, 1979, after an unscheduled meeting of the Federal Reserve’s key interest-rate-setting committee, the Federal Open Market Committee (FOMC), Paul Volcker, the Fed chair, announced that the Fed would henceforth attempt to tightly regulate bank reserves and that interest rates could be expected to rise.6 It was the Fed’s response to a wave of inflation that was threatening domestic instability, America’s global standing and the status of the dollar.
