Why is the Fed blamed for high interest rates (close to 20%) in the 1970's? Group of answer choices They created so much additional bank reserves which increased the money supply so much that inflation became expected as a permanent problem. Trick question - interest rates were low (close to 0%) throughout the 1970's. The Fed did not create enough bank reserves through buying government securities in open market operations. The Fed raised the discount rate so high that banks had no choice but to follow and raise their interest rates too