The so-called "Great Inflation" was just getting started in 1965. The economy was running "too hot", some would say. There was a policy-induced near-recession in 1966-67. By 1970 the inflation was bad enough and the monetary policy reaction strong enough that we did get recession:
Having choked off the money supply as an anti-inflation device in 1966 so tightly that it produced a serious slump in housing and construction (called by some a mini-recession), the central bank started pouring out money too quickly and generously in 1967 and thereby spoon-fed a new inflation.
... in the closing months of 1969 ... Milton Friedman ... in Newsweek, in discussions with key figures in the Administration, and even in one telephone conversation with William McChesney Martin, Friedman argued that the Federal Reserve had now kept the money supply choked off for so long that further restrictions threatened a severe recession.
- Excerpts from "Nixonomics: How the Game Plan Went Wrong" by Rowland Evans Jr. and Robert D. Novak, Atlantic Monthly, July 1971.