Not a bubble but a regime, and the most important inflation case in the program (it underwrites everything in M7.02/M7.03 about central-bank credibility).
What caused the 1970s inflation?
The displacement/causes: a toxic combination. Cost-push shocks (the 1973 OPEC oil embargo quadrupled oil prices; the 1979 Iranian revolution doubled them again) hit an economy already running hot from demand-pull pressures (Vietnam War and Great Society deficits) and accommodative monetary policy under Fed chair Arthur Burns, who repeatedly eased under political pressure.
The excess (the invisible one): the truly dangerous development was that inflation expectations un-anchored. Once workers and firms came to expect high inflation, they built it into wage demands and price-setting, a wage-price spiral in which expected inflation caused actual inflation, self-fulfillingly. The Phillips-curve tradeoff (the idea that you could buy lower unemployment with a little more inflation) broke: America got both high inflation and high unemployment, stagflation, which the prevailing theory said was impossible. CPI inflation peaked near 14.8% (early 1980).
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How did Volcker end it, and what did it cost?
The trigger/cure, Volcker: Paul Volcker, appointed Fed chair in 1979, understood that the only way to break entrenched expectations was to break them deliberately and credibly, whatever the cost. He raised the fed funds rate to ~19–20% (1981).
The crash (engineered on purpose): the result was a brutal double-dip recession, with unemployment peaking at 10.8% (late 1982), the worst since the Depression. But it worked: inflation fell from ~14% to ~3–4% by 1983, and stayed down.
Lesson: once inflation expectations un-anchor, the only cure is a deliberate, credibility-restoring recession. There is no painless exit, and the longer you wait (as Burns did), the higher the eventual cost. The credibility Volcker bought with the 1982 recession is the asset the Fed then spent for the next forty years; every time markets believed "the Fed will do whatever it takes on inflation," they were cashing Volcker's cheque. It is why modern central banks guard their inflation-fighting credibility so fiercely (M7.02's independence debate), and why the 2022 hiking cycle was framed explicitly as "not repeating the stop-go mistakes of the 1970s." For the analyst: a regime of un-anchored inflation is deadly for financial assets (the 1970s were among the worst decades ever for a 60/40 portfolio in real terms), which is the whole motivation for the growth/inflation 2×2 in sector rotation.