Treasury and Fed sign the 1951 Accord, restoring Federal Reserve monetary independence

On March 4, 1951, the U.S. Treasury and Federal Reserve issued a joint statement declaring "full accord" on separating debt management from monetary policy. During World War II, the Fed had pegged Treasury bond yields at low rates to finance war debt, effectively surrendering control of interest rates to the Treasury. The Accord ended that arrangement, freeing the Fed to raise rates to fight Korean War-era inflation that had reached an annualized 21 percent by February 1951.