The Federal Reserve is irrationally obsessed with the 1970s

On the badly misunderstood event that explains the Fed's inflation anxiety

Cars line up to get gas during the oil crisis of the 1970s.
(Image credit: ClassicStock / Alamy Stock Photo)

By the time we notice inflation, is it too late? If you've been following the debate about whether the Federal Reserve should hike interest rates today, you've probably heard references to this basic question. Many Fed policymakers, including doves like Chair Janet Yellen, believe that once the inflation rate gets going, it's like a runaway train — nearly impossible to stop and demolishing everything in its path.

But there's just one problem. This belief is based on just one badly misunderstood historical example in the United States.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.