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Imagining Financial Armageddon, Making Emergency Loans in the Crisis, and Pursuing QE1

  • David E. Lindsey
Part of the Palgrave Studies in American Economic History book series

Abstract

With the funds rate objective having reached 5–1/4 percent by mid-2006, for a time the economy actually did seem well balanced. The FOMC on August 8 held the rate steady. The statement foresaw that “inflation pressures seem likely to moderate” because of contained inflation expectations and previous tightening that, along with other factors, restrained aggregate demand. The next paragraph of the statement repeated only part of the previous statement, deleting the excessively obvious reference to the consistency of its future actions with its objectives:

Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.1

Keywords

Monetary Policy Central Bank House Price European Central Bank Fund Rate 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© David E. Lindsey 2016

Authors and Affiliations

  • David E. Lindsey

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