A lot of people didn't believe it would happen.
Like Lucy, the cartoon character who always yanks away the football Charlie Brown is about to kick, the Federal Reserve has often promised one thing and delivered another. But for the year just past, Paul Volcker and the Fed did hold the football in place. They more than talked a tough monetary policy; they followed one. Despite record interest rates, they didn't let the money supply grow past its projected ceiling.
''I spent years complaining the Fed created too much money too often,'' says Dr. Robert Genetski, chief economist at Harris Bank in Chicago. Now money growth has been slower than ''almost anyone would have dreamed of a year ago.''
''They've been aggressively conservative,'' says Edward Yardeni, vice-president at E. F. Hutton, the brokerage house. ''I give them straight 'A's' on the fight against inflation.''
''They were extremely vigilant,'' admits David Jones, chief economist for Aubrey Lanston, a bond house. ''If anything, they overdid it.''
For one measure of money, ''shift-adjusted M-1B,'' consisting of cash, checking, and some NOW account money, the Fed was aiming at the center of a 31/2 -to-6 percent growth target range. Despite recent weekly increases, M-1B will probably not reach its target.
''If we get up even to the bottom edge, we'd be doing a good deal,'' a Fed official said.
Now that the economy has stumbled into recession, the Fed has loosened its grip a bit. Between Nov. 2 and Dec. 23, $8.2 billion was added to M-1B, a growth rate that if kept up for a year would increase the money supply around 71/2 percent.
Observers say this late-in-the-year bulge doesn't mean the money supply has been let slip.
''If they allow a seasonal uptick, as far as I'm concerned that doesn't mean they're caving in,'' says Larry Wachtel, vice-president at Bache Halsey Stuart, another brokerage.
Comments like that mean Paul Volcker may have succeeded in his struggle to give the Fed's inflation fight credibility.
Skittery credit markets often scurry for high ground whenever weekly money supply figures announce an unexpected jump in money, even though the Fed cautions that weekly figures are highly volatile. Markets being what they are, they will still undoubtedly react to money growth news.
But lately economists and financial analysts all express admiration, grudging or otherwise, for the Fed's consistent toughness.
''It's an effort to atone for (the Fed's) excessively accommodative sins of 1980,'' says Mr. Jones at Aubrey Lanston. ''And they sense an excessive fiscal ease.''
Much of the reason the Fed has kept the screws on so long is its feeling it is the only arm of government with truly anti-inflationary policies. Wall Street has begun to agree. With the threat of $100 billion in deficits on the horizon, the Fed is beginning to look solid as the Rock of Gibraltar.
''The credibility problem seems to have been transferred to fiscal policy,'' says Dr. Yardeni.
Of course, tight monetary policy does carry serious side effects. When the Fed becomes the prime anti-inflation weapon, credit-sensitive sectors of the economy end up flat on their back. Bond prices fall into the basement when interest rates rise. Retail outlets with high inventory carrying costs get pushed into bankruptcy. Auto sales plummet, and the battered housing industry suffers most of all.
''(The Fed) has lost touch with reality,'' says Michael Sumichrast, an economist with the National Association of Homebuilders. ''They don't see the troops in the field. I know it's hard, but for us, high interest rates have caused a lot of suffering.''
And many economists now warn that the Fed faces a new danger - being overly restrictive. The current recession has been made more serious, they claim, because the Fed was closely watching M-2, a broader measure of the money supply, when it should have been paying more attention to M-1B.
''They were just dead wrong in looking at M-2,'' says Mr. Genetski at Harris Bank.
Since the Fed is below its target range, economists argue, the Federal Reserve has plenty of leeway for a little relaxation to help the economy climb out of its hole. But the Fed is planning to stay macho in 1982. The preliminary target for the new M-1 (the old shift-adjusted M-1B, plus all NOW accounts) calls for 21/2 to 51/2 percent growth.
The political cacophony calling for a relaxation may grow louder. If unemployment nears double digits with the '82 elections coming into view, a lot of congressmen may soon become more interested in monetary policy.