Business: Faulting the Fed On Money

The perils of stop-go

In its efforts to keep the economy expanding steadily and avoid inflation, the Federal Reserve Board strives to hold the annual increase in money supply with-in a narrow range—at present, 4% to 6½%. Yet for most of the past year, money growth has been riding a wild roller coaster—dropping all the way down to zero in one month, soaring to an annual rate of almost 20% in another. In the past few months, the money supply has been swelling at such a fevered rate as to cause anxiety even among...