The Fed's Not Pegging Bond Yields,Yields Have the Fed Pegged

It was once said that monetary policy was a string – the central bank could pull on it in order to tame inflationary pressures, but it could never push it in order to halt the onrush of recession or worse. As one consequence, all sorts of dire predictions were made during the thirties about how the world might never recover. The central bank was to be shelved.

There was a great revival in theoretical interest of money and money supply in the sixties after decades of neglect. The timing was certainly appropriate, in many ways necessary given what was just then beginning to unfold. The Great Inflation was every bit as consequential if not quite as pernicious as the Great Depression had been.