Interest rates displayed extreme volatility in
1980, reaching record highs in early spring,
then plummeting until midsummer, only to
rise above their previous peaks by late fall.
Interest rates were more variable not only in a
cyclical sense, but also in their weekly and
daily behavior. It is unlikely that any single
factor was responsible for the volatile behavior
of interest rates in the past year, as rates
are subject to myriad influences. These include
changing inflationary expectations, exogenous
commodity-specific supply shocks, fiscal
and monetary policy actions, and national
and international political developments.