The Fed hasn’t confronted an oil shock this severe since the 1973 Arab-Israeli War, which triggered the notorious stagflation episode of that decade. Comparing the oil shocksAs the world’s largest oil-producing country, the United States is much less reliant on imported crude than it was during past energy crises. That inflicted significant pain on the US economy, which was heavily dependent on foreign oil at the time. Marty Lederhandler/APBut now, America is the world’s top oil producer and it has a services-based economy, meaning it’s less vulnerable to global oil production cuts. And Fed officials, learning from Burns’ missteps, now broadly believe that monetary policy does play an important role in managing economic shocks.

Source: CNN March 15, 2026 14:32 UTC