The Credibility of Monetary Announcements

Karl Brunner's interest in rules for monetary policy is well-known. Since the Federal Reserve would not follow pre-announced rules and Congress did not require them to do so, Brunner (1977) supported the efforts of Robert Weintraub and others to require the Federal Reserve to announce targets for monetary growth.1 He testified in favor of targets after Congress approved Congressional Resolution 133. This resolution required the Federal Reserve to provide the public and Congress with more precise information about the monetary actions that they contemplated. The announcements have not proven to be reliable guides to actual money growth. Should they be abandoned?