![]() ![]() With this practice, termed “bills only,” it allowed market forces to determine long-term government bond rates. In setting short-term interest rates (conditions in the money market), the FOMC engaged in open-market purchases exclusively in Treasury bills. That policy, which was aimed at macroeconomic stability, contrasted with the pre-World War II policy, which focused on preventing speculation presumed to create unsustainable asset bubbles. In a policy Martin termed “lean against the wind,” the FOMC moved short-term interest rates in a way that countered unsustainable strength or weakness in economic activity. During this period, the Fed used the independence gained with the Treasury-Fed Accord to create a new kind of monetary regime. Only toward the end of the 1960s did inflation rise. Low and stable inflation along with generally robust growth characterized most of his tenure. was chairman of the Board of Governors and the Federal Open Market Committee from April 1951 until January 1970. ![]()
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