Monetary Accord Of 1951


DEFINITION of 'Monetary Accord Of 1951'

A 1951 agreement between the U.S. Secretary of the Treasury and the Federal Reserve Board on government financing and monetary policy. The accord represented the resolution of a major conflict between the Treasury and the Fed over World War II financing. Perhaps most significantly, the accord gave the Fed independence from the Treasury.

BREAKING DOWN 'Monetary Accord Of 1951'

The Fed first acquired responsibility for setting monetary policy in 1913. Through monetary policy, the Fed (the U.S.'s central bank) is able to manipulate the money supply and affect interest rates. While some people believe that the Fed is necessary to smooth out the ups and downs in the economy, others believe that its policies are in fact responsible for the booms and busts of the business cycle.

  1. Monetary Policy

    Monetary policy is the actions of a central bank, currency board ...
  2. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  3. Treasury Secretary

    The Secretary of the Treasury is a member of the Presidential ...
  4. Federal Reserve Board - FRB

    The governing body of the Federal Reserve System. The seven members ...
  5. U.S. Treasury

    Created in 1798, the United States Department of the Treasury ...
  6. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
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