Review

On October 6, 1979, the Federal Reserve announced the beginning of a new approach to the implementation of monetary policy it would attempt to achieve better control of the growth of the monetary aggregates by “placing greater emphasis in day-to-day operations on the supply of hank reserves and less emphasis on confining short-term fluctuations in the federal funds rate.” 

There a tremendous amount of publicity about the U.S. grain export agreements with the U.S.S.R. in 1975 and China in 1980. The threat of not renewing the agreement with Russia, which would have terminated on October 1 this year, was considered by some to be a heavy penalty—both to the United States and the Soviets.