{"id":1290,"date":"2013-01-21T15:48:26","date_gmt":"2013-01-21T15:48:26","guid":{"rendered":"http:\/\/megalextoria.wordpress.com\/?p=1290"},"modified":"2013-01-21T15:48:26","modified_gmt":"2013-01-21T15:48:26","slug":"federal-reserve-was-blind-to-crisis-in-2007","status":"publish","type":"post","link":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/2013\/01\/21\/federal-reserve-was-blind-to-crisis-in-2007\/","title":{"rendered":"Federal Reserve was blind to crisis in 2007"},"content":{"rendered":"
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Federal Reserve officials were largely unaware of the financial crisis brewing in 2007, until they found themselves in the middle of it, transcripts released Friday show.<\/p>\n

The more than 1,300 pages offer the most comprehensive look at the Federal Reserve\u2019s deliberations, leading up to the start of the Great Recession in December 2007. It\u2019s the central bank\u2019s policy to release full transcripts with a five year lag.<\/p>\n

Here\u2019s how the year played out.<\/p>\n

January 2007: Calm before the storm<\/p>\n

At the beginning of the year, many Fed officials, including Chairman Ben Bernanke, thought one of the biggest risks was that the economy might grow stronger than expected.<\/p>\n

At the time, the Fed\u2019s key interest rate was at 5.25%, and the central bank was leaning toward raising it further, rather than easing monetary policy.<\/p>\n

\u201cMy recommendation also is to take no action and to maintain a bias toward further tightening,\u201d Bernanke said at the first meeting of the year, noting that inflation risk had picked up and the housing market had shown some improvement after slumping in 2006.<\/p>\n

\u201cThe housing market has looked a bit more solid, and the worst outcomes have been made less likely,\u201d he said.<\/p>\n

At that point, they didn\u2019t realize that losses from subprime mortgages would ignite the deepest financial crisis since the Great Depression.
\nFast forward two months, and still, the Fed thought the worst was over for the housing sector.<\/p>\n

\u201cThe central scenario that housing will stabilize sometime during the middle of the year remains intact,\u201d Bernanke said at a meeting in March, adding later, \u201cThe effects of the decline in subprime lending may have already been mostly seen, since that has slowed from last fall.\u201d<\/p>\n

Full article: http:\/\/money.cnn.com \u2026 reserve-transcripts\/<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Federal Reserve officials were largely unaware of the financial crisis brewing in 2007, until they found themselves in the middle of it, transcripts released Friday show. The more than 1,300 pages offer the most comprehensive look at the Federal Reserve\u2019s deliberations, leading up to the start of the Great Recession in December 2007. It\u2019s the central bank\u2019s policy to release full transcripts with a five year lag. Here\u2019s how the year played out. January 2007: Calm before the storm At the beginning of the year, many Fed officials, including Chairman Ben Bernanke, thought one of the biggest risks was that the economy might grow stronger than expected. At the time, the Fed\u2019s key interest rate was at 5.25%, and the central bank was leaning toward raising it further, rather than easing monetary policy. \u201cMy recommendation also is to take no action and to maintain a bias toward further tightening,\u201d Bernanke said at the first meeting of the year, noting that inflation risk had picked up and the housing market had shown some improvement after slumping in 2006. \u201cThe housing market has looked a bit more solid, and the worst outcomes have been made less likely,\u201d he said. At that point, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[249,648,692],"class_list":["post-1290","post","type-post","status-publish","format-standard","hentry","category-news-and-politics","tag-audit-the-fed","tag-end-the-fed","tag-federal-reserve"],"_links":{"self":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/1290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/comments?post=1290"}],"version-history":[{"count":0,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/posts\/1290\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/media?parent=1290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/categories?post=1290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.megalextoria.com\/wordpress\/index.php\/wp-json\/wp\/v2\/tags?post=1290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}