Strategies and Tactics for Monetary Control

Nearly twenty years have passed since we undertook, at the request of a Congressional committee, to "appraise Federal Reserve policy in the light of the Congressional mandate." See Brunner and Meltzer (1964a, 1964b, 1964c). At the time, there was much less public and professional scrutiny of Federal Reserve decisions and actions. Minutes were not released; money targets were not announced; there were no regularly scheduled oversight hearings; and the weekly and monthly data on the money stock were not the subject of widespread speculation and comment. Market participants, and many economists, used the level or direction of change in short-term market interest rates and free reserves - total reserves minus required reserves and member-bank borrowing - as the principal measures of monetary "tightness" or "ease." Much of the professional criticism was limited to comments about excessive or insufficient "tightness" or "ease" during particular periods.