In the early post-war years, the Fed was reluctant to continue its wartime agreement with the Treasury because it believed the result would be

Question

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The Fed was reluctant to continue its wartime agreement with the Treasury because it believed that the result would be inflation. The agreement involved the Fed purchasing government bonds to keep interest rates low and to finance the war, but this also increased the money supply and could lead to inflation if it continued after the war ended.

In the Early Post-War Years, the Fed Was Reluctant to Continue