Warsh Call for Fed-Treasury Accord Stirs Debate in $30 Trillion Bond Market

And that was exactly what the 1951 agreement brought to an end. The Fed had capped both short- and longer-dated Treasury yields during World War II and its aftermath to hold down federal borrowing costs. That recipe caused postwar inflation to soar, however. The Truman administration — in a watershed moment that crystallized the Fed’s autonomy over monetary policy — then agreed to let policymakers set rates on their own.“Rather than insulating the Fed, it could look more like a framework for yield-curve con ...