Inflation rose to 7.9% in February, the highest rate since 1982. It is still well below the peak of 14.6% in 1980. The Federal Reserve Board raised its benchmark interest rate by 0.25%, and will almost certainly raise it several more times this year, to bring inflation under control.
Jeanna Smialek writes in the New York Times of what happened in the early ’80s:
Mr. Volcker’s Fed rolled out policies that pushed a key short-term interest rate to nearly 20 percent and sent unemployment soaring to nearly 11 percent in 1981. Car dealers mailed the Fed keys from unsold vehicles, builders sent two-by-fours from unbuilt houses and farmers drove tractors around the Fed building in Washington in protest. But the approach worked, killing off the rapid price inflation that had festered throughout the 1970s.