Bloomberg reports that according to Nomura Holdings Inc, Beijing’s unprecedented determination to curb the property sector could be China’s “Volcker Moment” as it will cause a “significant” slowdown in economic growth, 

Unlike in previous economic down cycles, Chinese authorities look set to tighten property sector policy and tame prices this time, in order to reduce wealth inequality and boost the falling birthrate, economists led by Lu Ting wrote in a report. Policy makers will be willing to sacrifice near-term economic growth to tame house prices and divert financial resources out of the property sector, which accounts for a quarter of China’s gross domestic product, they wrote.

A “Volcker Moment” refers to a policy change like the decision by the Federal Reserve under former Chairman Paul Volcker to quickly raise interest rates to 20% to contain the inflation of the late 1970s. That sudden change caused a jump in unemployment but also led to inflation slowing.