That is the kickdown cable that tells the auto to shift down a gear or two when you put your boot into the throttle.
The cable inner should pull out, you can do it with your fingers. As the stopper on the inner cable is not all the way in it looks like the cable may be seized. This is not uncommon.
Finding new kickdown cables is a bit of an art, they are different lengths though most cables fit most cars. Some are still available new from gcp.se, I have had mixed success having throttle and kickdown cables made. Others here are masters of the parts books, someone will likely post a part number with a diagram from a parts book.
Then there is fitting a replacement cable, it can be done without removing the automatic valve body (the guts of the auto) though is time consuming and will likely involve lots of swearing as the cable is difficult to edge into place in that tiny little gap. Best take it to an auto shop or one of the Volvo specialist workshops - assuming the cable is seized.
When in there have the vacuum hoses replaced too, in the background you have some trouble coming your way with idling and fuel consumption. The vacuum hoses die (after 35 years) and start to leak causing some problems, having them replaced or replacing them yourself with good quality hose will avoid this.
