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A Journey Down Memory Lane — Federal Reserve Style

Ever read old news stories dated before a major crisis and marvel at how no-one saw the carnage coming — or in the case of Archduke Ferdinand, “Who thinks visiting Sarajevo with little-to-no security is a good idea??”

Looking back with the benefit of hindsight can be a fun and interesting exercise, unless you are Sophocles.

July 20, 2005

In mid-February, when I presented our last report to the Congress, the economy, supported by strong underlying fundamentals, appeared to be on a solid growth path, and those circumstances prevailed through March. Accordingly, the Federal Open Market Committee (FOMC) continued the process of a measured removal of monetary accommodation, which it had begun in June 2004, by raising the federal funds rate 1/4 percentage point at both the February and the March meetings.” [Editor’s Note: The Fed was so confident they raised rates in February … FEBRUARY!!!]

July 19, 2006

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July 18, 2007

“ The pace of home sales seems likely to remain sluggish for a time, partly as a result of some tightening in lending standards and the recent increase in mortgage interest rates [Adjustable-rate mortgages were too good to be true, just like the Double-Down]. Sales should ultimately be supported by growth in income and employment as well as by mortgage rates that — despite the recent increase — remain fairly low relative to historical norms. However, even if demand stabilizes as we expect, the pace of construction will probably fall somewhat further as builders work down stocks of unsold new homes. Thus, declines in residential construction will likely continue to weigh on economic growth over coming quarters, although the magnitude of the drag on growth should diminish over time.” [This feels like watching a movie protagonist march unknowingly to his certain doom].

July, 15, 2008

February 24, 2009

July 21, 2009

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July 21, 2010

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Bugger.

Written by

Founder — SW4 Insights. Public policy junkie and Central Bank Watcher. Recovering journalist and former Senior Director at Hamilton Place Strategies

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