Daniel L. Thornton reviews the policy actions of the Federal Open Market Committee (FOMC) during 1982. Because of the uncertainties about the relative behavior of M1 and M2 during the year due to technical factors, financial innovations, and deregulation, and because of the significant decline in the velocity of M1, the FOMC shifted the relative weights given to M1 and M2 for short-run policy purposes. Eventually, it suspended the use of M1 as an intermediate policy target. Thornton shows that, despite these uncertainties, both M1 and M2 were close to the FOMC’s desired short-run target paths.