US Federal Reserve ‘underestimated financial crisis’

They have everyone thinking they can see into the future, but after 100 years it is pretty fair to say that, on the big things especially, the Fed governors and the other wizards are pretty blind.

(From BBC.com)

Mr Geithner, who at the time was president of the New York Federal Reserve Bank, said in August of that year: “We have no indication that the major, more diversified institutions are facing any funding pressure.”

Meanwhile in October 2007 Janet Yellen, another member of the Fed’s most senior committee, the Federal Open Market Committee, said: “I think the most likely outcome is that the economy will move forward toward a soft landing.”

Click here for the story.