With the monetary policy instruments then available, and with the fixed exchange rate, it was not possible to quarantine the monetary effects, and the money supply was soon growing at more than 20 per cent per annum. We did not help ourselves very much either with the way we set wages.
The Policy Response At the Federal Reserve, we take our dual-mandate obligations of maximum employment and price stability very seriously, and, since March 3, we have deployed our entire toolkit to provide critical support to the economy during this challenging time.