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Treasury-Fed Accord

March 1951

In March 1951, the US Treasury and the Federal Reserve reached an agreement to separate government debt management from monetary policy, laying the foundation for the modern Fed.

William McChesney Martin Jr. is Sworn in as Chairman of the Federal Reserve Board of Governors (Photo: Associated Press)

by Jessie Romero, Federal Reserve Bank of Richmond

  • 1

    Unless otherwise noted, this account is derived from Hetzel and Leach (2001) and Federal Reserve Bank of Richmond (2001).

  • 2

    Eccles was chair from 1934-1948. Although President Truman did not reappoint him to the chairmanship in 1948, Eccles remained on the Board and was a governor at the time the accord was reached.


The Marriner S. Eccles Document Collection at FRASER. “Summary of Meeting of President Truman and the Federal Open Market Committee.” January 31, 1951.

Eccles, Marriner S. Beckoning Frontiers, Public and Personal Recollections. Ed. Sidney Hyman. New York: Alfred A. Knopf, 1951.

Hetzel, Robert L., and Ralph F. Leach. “The Treasury-Federal Reserve Accord: A New Narrative Account,” Federal Reserve Bank of Richmond Economic Quarterly 87, no. 1 (Winter 2001): 33-55.

Federal Reserve Bank of Richmond. “The 50th Anniversary of the Treasury-Federal Reserve Accord.” 2001.

Federal Reserve Bank of Richmond. “Monetary Policy Independence.” 2013.

Stein, Herbert. The Fiscal Revolution in America: Policy in Pursuit of Reality. Chicago: University of Chicago Press, 1969.

The William McChesney Martin, Jr. Collection at the Missouri Historical Society. “Joint Announcement by the Secretary of the Treasury and the Chairman of the Board of Governors, and of the Federal Open Market Committee, of the Federal Reserve System." March 4, 1951.

Written as of November 22, 2013. See disclaimer.