Inflation Lessons From the 1970s

<p>With prices on the rise in the U.S. economy, the Federal Reserve is expected to announce on Wednesday an increase in interest rates, essentially pouring a cold glass of water on the economy.</p><p>Why would the central bank do that? The answer lies in the inflation crisis of the 1970s, when a failure to react quickly enough still looms large in the memory.</p><p>Guest: <a href="https://www.nytimes.com/by/jeanna-smialek">Jeanna Smialek</a>, a reporter covering the Federal Reserve and the economy for The New York Times.</p><p>Have you lost a loved one during the pandemic? The Daily is working on a special episode memorializing those we have lost to the coronavirus. If you would like to share their name on the episode, please RECORD A VOICE MEMO and send it to us at <a href="mailto:thedaily@nytimes.com">thedaily@nytimes.com</a>. You can find more information and<a href="https://www.nytimes.com/2022/02/03/podcasts/daily-memorial-covid.html"> specific instructions here</a>.</p><p>Background reading: </p><ul><li>The Federal Reserve is facing<a href="https://www.nytimes.com/2022/03/14/business/economy/powell-fed-inflation-volcker.html"> the fastest inflation</a> most Americans have ever seen. The response may require some aggressive — and painful — measures.</li><li>What is inflation, why is it up, and whom does it hurt?<a href="https://www.nytimes.com/article/inflation-definition.html"> Here’s what to know</a>.</li></ul><p>Want more from The Daily? For one big idea on the news each week from our team, <a href="https://www.nytimes.com/newsletters/the-daily?module=inline">subscribe to our newsletter</a>. </p><p>For more information on today’s episode, visit <a href="http://nytimes.com/thedaily?smid=pc-thedaily">nytimes.com/thedaily</a>. Transcripts of each episode will be made available by the next workday. </p>