In the first annual Homer Jones Memorial lecture, reprinted in this Review, Beryl Sprinkel, chairman of the President’s Council of Economic Advisers, examines the dilemmas currently facing monetary policymakers. Sprinkel notes that the aberrant behavior of M1 velocity—the relationship between the M1 money stock and economic activity—has diminished its usefulness as an intermediate target of monetary policy and made the consequences of monetary policy actions less certain. Sprinkel points out that, regardless of the current problems they face, monetary policymakers must avoid policy actions that rekindle inflation. Moreover, monetary policy must not be asked to resolve problems, such as the large federal deficit and the large U.S. trade deficit, that monetary policy cannot effectively address. Sprinkel concludes by emphasizing that Homer Jones had a major influence on monetary economics over the past several decades. Homer’s distrust of policy fine-tuning and his introspective, no-nonsense, analytical approach is the legacy for which he will be remembered.