Policy was implemented during this period by estimating the total reserve growth necessary to meet the money-growth target and by holding to the associated path for nonborrowed reserves. In the process, the federal funds rate was free to move to whatever level would be consistent with the money-growth objective over time.
Monetary policy was focused on steadily reducing inflation, and policymakers were less certain about what increase in nominal and real interest rates would be required to achieve the objective of reducing inflation than they were about the money-inflation relationship. Moreover, it served the interests of policymakers to emphasize that the markets, not policymakers, were controlling interest rates along the way.