Rates had already risen by five points

 Denialism on the force of monetary policy:

Romer claims Volker made a big change in 1979. Lets look:

 OK. I have the one year treasury up 5 points since its low. Yields on one year safe debt already hit 10.5 points in 1978.  Volker made threats to forward guide us to much higher rates, in 1979, but he never really sold many securities to match the threat.

Gold was up above 200 from its predefault low in the 20s. Gold and the one year kept climbing, they should have diverged if Volker was the thrust. Volker did not take any real action until the recession hit in 1980 and he executed the usual bailout. We finally see gold and the one year diverging in Q2 of 1980.

What impresses me about the period was the willingness of tax payer to pay 10.5% even before Volker. We were lied to or we were pretty desperate.  It seems to me the underlying theme is the Swamp barely surviving a turbulent overnight government default on gold.  There were larger forces way beyond forward guidance.

If you gave me this chart, blind, and said I had to place some central bank event. Then I would more likely pick 1980-1981, the peak on that period as something seems to have changed the terms then. And that would be be the gold peak. By then Volker was well underway with the regularly scheduled bailouts.

Look at short term inversion. We normally expect the federal funds rate to be a bit late:

In August of 79, when Volker made his threat, the federal funds was already way above the one year, too high.   He managed to talk the federal funds rate up a bit, then we get a long period of volatility, a good sign that Volker was mostly faking it while bailing out the Swamp.

What else? There was a rapid period of three recessions in a row after the default.

The more likely story

The US Treasury/Fed was a heavy player in the gold industry and associated precious metals due to being a socialist gold hoarder. Nixon exited the gold industry mainly because boomer were refusing to pay for any of the previous years of crappy government. He was aiming for a gradual, Roosevelt gold repricing, but sobered up the next morning.  It takes about 8 years to reset pricing, supply and demand is not overnight stuff. Forces were half way through the repricing by the time Volker showed up, but he was better than nothing. The reason for the forward stability post 1982 was that the precious metals market was back in shape.