Nasdaq · October 10, 1979
The week the Fed changed its method
-4.06%
single-day change vs previous close
What happened that day?
- On 10 October 1979 the Nasdaq fell 4.06%
- Four days earlier, on a Saturday, the Federal Reserve had announced it was changing how it worked
- Until then it had targeted the interest rate directly. From now on it would target the quantity of money in the system instead
- The meaning was simple: to stop inflation, it would let rates go as high as they had to
- Rates shot up right after, bonds collapsed, and stocks went with them
- The method did break inflation, at the price of two recessions in the early 1980s
- From the peak the index was down 12.92%
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.