On January 4, 1980, the President Carter announced an embargo on grain exports to the Soviet Union in response to the Soviet armed invasion of Afghanistan. The embargo was designed to limit U.S. grain exports to the Soviet Union to 8 million metric tons, an amount to which the U.S. was committed under the 1975 five-year grain sale agreement.
The U.S. economy was subjected to severe strains during the first half of 1980. When major economic developments occur so rapidly, it is difficult to isolate the basic forces that are driving the economy.
Market interest rates have moved over a wide range since mid-1979. In the last half of 1979 and in the first three months of 1980, interest rates rose to unprecedented levels. Rates on highest grade corporate bonds, for example, increased from 9.3 percent in June 1979 to 13 percent in March 1980.
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