Business

A chronicle of uncertainty, then bold action, in 2008 Fed transcripts

Federal Reserve chief Ben S. Bernanke was unusually clearsighted in his assessment of the economic crisis.
Federal Reserve chief Ben S. Bernanke was unusually clearsighted in his assessment of the economic crisis.Jose Luis Magana/Associated Press/File 2008

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WASHINGTON — On the morning after Lehman Brothers filed for bankruptcy in September 2008, most Federal Reserve officials still believed that the US economy was growing, and that it would continue to grow, avoiding a recession.

They generally were not convinced the spreading financial crisis would drag down the economy, according to a transcript the Fed released Friday with other transcripts of its 2008 meetings.

Several officials applauded what they described as the Fed’s decision to let Lehman fail.

But in a pattern that repeated itself throughout the financial crisis, Fed officials soon concluded that they had been wrong in their assessment of the economy, and they would need to do much more.

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