Volcker’s rate hike indirectly saddled Brazilians with crippling consumer financing costs

Evidence

As part of the response to an inflation crisis in the 1980s (caused by the debt crisis initiated by the US Federal Reserve’s interest rate increase under Chairman Paul Volcker), the government had saddled Brazilians with some of the highest real interest rates in the world. This worked to stabilize the currency, but it also meant that even if regular people could buy their first washing machine under Lula, they paid exorbitant (and hidden) fees to finance them. — Vincent Bevins, If We Burn, 313

Categorization

• XREF: A concrete instance of the debt crisis / structural-adjustment channel linking US monetary policy to Global South everyday hardship. — connects to: Volcker’s US interest-rate hikes triggered the Latin American debt crisis and deindustrialization — Vincent Bevins, If We Burn: The Mass Protest Decade and…, 136