Lagged reserve accounting and the Fed's new operating procedure
Adoption of the Fed's new reserves-oriented operating procedure on October 6, 1979, was greeted with praise by both admirers and critics of the Federal Reserve System. Especially encouraged were those who, for many years, had urged the Fed to abandon its interest rate operating procedure in favor of a reserves targeting procedure. These critics viewed the proposed new procedure as a major step in the right direction, even as they withheld final judgment until they saw how the new procedure was implemented.
