Major Events in U.S. Inflation History

Originally a thread on X/Twitter:

1/6: I’ve been spending a lot of time this past year thinking about inflation in the US. There are skeptics and there are some that believe the signs and portents are here. (I think it’s already here and that our systems aren’t tuned to measure it correctly.) A few fun stats:

2/6: The highest inflation rate ever observed in the US was 29.78% in 1778. Since the introduction of the CPI, the highest inflation rate observed in the US was 19.66% in 1917.

3/6: The most dramatic deflationary period in U.S. history took place between 1930 and 1933, during the Great Depression. The closest the United States has ever gotten to hyperinflation was during the Civil War (1860–1865) and only in the Confederate states.

4/6: The Great Inflation was the defining macroeconomic period of the second half of the twentieth century. Lasting from 1965 to 1982, it forced a complete restructuring of Fed and central bank policies.

5/6: In 1964, inflation was just over 1% and had been at this level for a sustained period. Inflation began moving upward in the mid-1960s and broke 14% percent in 1980. It eventually declined to average about 3.5% percent in the 2nd half of the 1980s.

6/6: In case you’re wondering how compounding small levels of inflation over time is your mortal enemy if you’re a saver, consider this: It would take $31.14 of today’s dollars to buy $1 of goods back in 1900. A mere 2.88% compound rate over 121 years ends up hurting!