The New York Times article on February 21, 2014 reads "Fed Misread Crisis in 2008, Records Show."
It talks about how the FED had no clue the economy was already in recession and to events leading up to the Lehman Brothers' bankruptcy in early 2008.
The Fed’s Actions in 2008: What the Transcripts Reveal
FEB. 21, 2014
On Friday, the Federal Reserve released the transcripts of the 2008 meetings of its Federal Open Market Committee, which sets monetary policy. The transcripts provide a detailed account of some of the Fed's key decisions during that crisis year. Here is a look at the fuller picture that the documents have provided. Related Article »
JANUARY – FEBRUARY
The Gathering Storm
Federal Reserve officials are unaware in January 2008 that the economy has already entered a recession. But the Fed's chairman, Ben S. Bernanke, and his closest advisers are feeling nervous. They worry that the Fed's actions at the end of 2007 have been insufficient, and that tumbling stock prices represent the start of a broader pullback in investment.
Jan. 9
EMERGENCY MEETING Fed officials conclude in a 5 p.m. conference call that “substantial additional policy easing in the near term might well be necessary.”
Both Mr. Bernanke and Ms. Yellen voice pessimism in the conference call.
MR. BERNANKE: “I think there are a lot of indications that we may soon be in a recession. I think a garden-variety recession is an acceptable risk, but I am also concerned that such a downturn might morph into something more serious.” View Transcript »
Others, like Richard Fisher of the Dallas Fed, are more bullish.
MR. FISHER: "While there are tales of woe, none of the 30 C.E.O.s to whom I talked, outside of housing, see the economy trending into negative territory. They see slower growth. Some of them see much slower growth. None of them at this juncture — the cover of Newsweek notwithstanding, a great contra-indicator, which by the way shows ‘the road to recession’ on the issue that is about to come out — see us going into recession.”
Jan. 11
Bank of America announces it will buy the nation's largest mortgage lender, Countrywide Financial, for just $4 billion.
Jan. 21
EMERGENCY MEETING At 6 p.m. on Martin Luther King's Birthday, Fed officials decide they can't wait any longer to cut interest rates. The next day the Fed announces the biggest interest rate reduction in more than two decades, temporarily halting the stock market's slide. The benchmark rate is cut 75 basis points, to 3.5 percent.
Early in 2008, as signs of crisis are building, Janet L. Yellen scolds the other members of the Open Market Committee, seeking to get them to recognize that they have not done enough.
Read more The Fed’s Actions in 2008: What the Transcripts Reveal >>
It talks about how the FED had no clue the economy was already in recession and to events leading up to the Lehman Brothers' bankruptcy in early 2008.
The Fed’s Actions in 2008: What the Transcripts Reveal
FEB. 21, 2014
On Friday, the Federal Reserve released the transcripts of the 2008 meetings of its Federal Open Market Committee, which sets monetary policy. The transcripts provide a detailed account of some of the Fed's key decisions during that crisis year. Here is a look at the fuller picture that the documents have provided. Related Article »
JANUARY – FEBRUARY
The Gathering Storm
Federal Reserve officials are unaware in January 2008 that the economy has already entered a recession. But the Fed's chairman, Ben S. Bernanke, and his closest advisers are feeling nervous. They worry that the Fed's actions at the end of 2007 have been insufficient, and that tumbling stock prices represent the start of a broader pullback in investment.
Jan. 9
EMERGENCY MEETING Fed officials conclude in a 5 p.m. conference call that “substantial additional policy easing in the near term might well be necessary.”
Both Mr. Bernanke and Ms. Yellen voice pessimism in the conference call.
MR. BERNANKE: “I think there are a lot of indications that we may soon be in a recession. I think a garden-variety recession is an acceptable risk, but I am also concerned that such a downturn might morph into something more serious.” View Transcript »
Others, like Richard Fisher of the Dallas Fed, are more bullish.
MR. FISHER: "While there are tales of woe, none of the 30 C.E.O.s to whom I talked, outside of housing, see the economy trending into negative territory. They see slower growth. Some of them see much slower growth. None of them at this juncture — the cover of Newsweek notwithstanding, a great contra-indicator, which by the way shows ‘the road to recession’ on the issue that is about to come out — see us going into recession.”
Jan. 11
Bank of America announces it will buy the nation's largest mortgage lender, Countrywide Financial, for just $4 billion.
Jan. 21
EMERGENCY MEETING At 6 p.m. on Martin Luther King's Birthday, Fed officials decide they can't wait any longer to cut interest rates. The next day the Fed announces the biggest interest rate reduction in more than two decades, temporarily halting the stock market's slide. The benchmark rate is cut 75 basis points, to 3.5 percent.
Early in 2008, as signs of crisis are building, Janet L. Yellen scolds the other members of the Open Market Committee, seeking to get them to recognize that they have not done enough.
Read more The Fed’s Actions in 2008: What the Transcripts Reveal >>
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