Philip A. Nuetzel reviews the deliberations and monetary policy decisions of the Federal Open Market Committee (FOMC) last year. In “The FOMC in 1986: Flexible Policy for Uncertain Times,” Nuetzel discusses the factors that led the FOMC to take an accommodative policy stance. To illustrate the FOMC’s approach to policy in 1986, Nuetzel first reviews its long-run policy decisions for the year. This is followed by a more detailed examination of the FOMC’s reasons for reducing its emphasis on M1 in guiding policy, and a discussion of other variables used by the FOMC as policy guides. Finally, the FOMC’s short-run policy decisions are reviewed chronologically, each in the context of the prevailing economic climate in which it was made.