The outlook turns even bleaker
(David Falconer/U.S. National Archives/Flickr)
The Dow slid to 777 at the market’s close on Aug. 12, 1982, meaning it had not gained anything in nearly two decades. Bearish sentiment had taken over. What Federal Reserve Chairman Paul Volcker aimed to do was wring inflation out of the economy by hiking interest rates to the highest level ever in the early 1980s. It was effective. Now Volcker could put on his white hat and start to cut rates. The darkest hour was past.