Into the storm

From Free exchange
January 18, 2013 - 2:30pm

WHEN 2007 began, America's economy was growing strongly even as the nation's housing-market bust was gathering pace. In the summer of that year, housing-market troubles precipitated the beginning of the financial crisis as the market for subprime-backed securities evaporated. And by the end of 2007 America was in recession. Though the most dramatic economic events of the financial crisis and recession occurred later, 2007 was the year the storm began, and so it is exciting to finally have access to the full transcripts of the meetings of the Federal Reserve's Federal Open Market Committee, which are released on a five-year lag.With the release of the transcripts, most of the world of economics journalism has begun hunting for evidence the Fed was underestimating the lurking danger. Such passages make for gripping reading, but it's worth remembering that the best indicator that the Fed un...

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