Inflation was a dominating force in financial markets in 1979. Despite a slowing economy, credit flows were only slightly less than the record growth reached in 1978. Against the Federal Reserve's intensified efforts to fight inflation by monetary restraint, credit demands pushed interest rates far higher than the country had seen in this century. But inflation itself, combined with the public's sinking hopes that it would diminish much in the foreseeable future, was an important element contributing to high interest rates.