“Leaning against the wind” is a distinctively telling metaphor that communicates to an audience of laypeople and nonprofessionals what the Federal Reserve is up to in a way that the phrase “contracyclical monetary policy” cannot. The metaphor was introduced by Chairman William McChesney Martin in congressional testimony just after the famous Accord in 1951. According to Ralph Young (private communication, August 6, 1976), he used it frequently for dramatic expository effect in informal colloquy before large groups, and its main purpose was “[Fed] political and public relations.” The phrase appears only rarely in the official minutes of the Federal Open Market Committee (FOMC). Nevertheless, I think that so apt a metaphor deserves a permanent place in the literature that attempts to describe Federal Reserve monetary policy. The connotation of the phrase “leaning against the wind” is clear enough. The policy response of the Fed to cyclical disturbances is to moderate disturbances in output, employment, and prices.

The performance of the U.S. economy during the 1950s was blemished by the occurrence of two recessions (1953–4 and 1957–8), interspersed by a mild inflationary boom (1954–7). Some Federal Reserve critics, such as Brunner and Meltzer (1964, pp. 51–2), Lombra and Torto (1973, pp. 48–9), and Guttentag (1966), regarded the Fed's responses to those cyclical disturbances as suboptimal. They ascribed the Fed's unsatisfactory behavior solely to a defective policy strategy attributable to an alleged discrepancy between policy action and policy intent. Presumably, the intent of the policy-makers was strongly countercyclical, whereas their understanding of how monetary policy was to work was defective.