Just kidding! But they really did miss the Great Recession.
From “Most Fed Officials Saw Economy Weathering Subprime Crisis,” Craig Torres, Bloomberg:
“Federal Reserve officials in August 2007 saw the beginnings of the crisis in subprime mortgages and concluded that the U. S. economy would be able to withstand it, even as some Fed members warned that it could trigger a downturn, transcripts from their 2007 meetings show.
“‘Well-capitalized banks and opportunistic investors will come in and fill the gap, restoring credit flows to non-financial businesses and to the vast majority of households that can service their debts,’ Donald Kohn, then vice chairman of the board, said in Aug. 2007….
“The transcripts show the committee’s slow grasp of the enormity of contagion that was to spread throughout global markets as a result of billions of dollars in low-quality housing assets that had been securitized into bonds and sold to banks and investors worldwide. Several FOMC participants such as then-San Francisco Fed President Janet Yellen sounded alarms in the first half of 2007. Still, the FOMC…showed reluctance to alter policy until August.
“‘The odds are that the market will stabilize,’ [Ben] Bernanke told the committee in Aug. 2007….
“[O]n June 27028, Yellen said the biggest risk to economic growth was housing, which she called the ‘600-pound gorilla in the room.'” Emphasis added.
It turns out that housing was more like an entire wildlife preserve filled with gorillas…