Sept. 11 attacks and AFTER

Sept. 11 attacks and AFTER
After having presided over what was known as the Great Moderation — nearly two decades of strong growth, modest inflation
and low unemployment, with just a few bumps along the way — Mr. Greenspan was credited with acting quickly after the terrorist attacks of Sept. 11, 2001, and the ensuing recession.
In the early years of Mr. Greenspan’s tenure, inflation rose above 5 percent as the economy improved,
and he responded with a sharp increase in interest rates.
Why the Fed Has Historically Changed Interest Rates -
In October 1979, Mr. Volcker held a late Saturday night news conference to announce a bold new package
of measures to tame runaway inflation that was in part a result of oil price increases.
By using that tool in such powerful fashion, Mr. Volcker risked sending the economy
into recession, which happened twice during his tenure (in 1980 and 1981-2).
But after the collapse in housing prices, the economy was plunged into what has become known as the Great Recession
By 2003, the Fed cut its benchmark rate to 1 percent, a 45-year low then regarded as the lowest viable level.
As the economy revived, the Fed removed its stimulus program slowly, raising interest rates at 17 consecutive meetings.
Mr. Greenspan resisted pressure to raise interest rates as unemployment declined.