The “GreatInflation” of the 1970s was eventually ended by another Fed chief, PaulVolcker. Recognising that Burns had created a spiral of inflationary expectations, in 1980 Volcker drastically increased interest rates to 19%.
When PaulVolcker became chairman in 1979, the Fed elevated inflation control above all other objectives. Volcker and other policymakers viewed rapid wage growth, especially when driven by expectations ...