How the Fed Responded to Past Recessions, Economic Shocks

The transcript discusses the history and management of financial crises, focusing on the Federal Reserve's role. It highlights the 1907 financial system failure, lessons on inflation, and the Fed's crisis management in 1987 and 2008. The transcript also covers pre-crisis perceptions of financial institutions, a series of economic shocks, and the Fed's inflation forecast mistake, emphasizing the impact of institutional groupthink.

What was a central dilemma faced by the Federal Reserve in 1907?

• Lack of financial resources

• Two incompatible goals

• Political interference

• Technological limitations

What is a key lesson about inflation mentioned in the video?

• Inflation should be ignored

• Inflation should be ingrained

• Inflation should not be ingrained

• Inflation is not a concern

What was the Federal Reserve's approach during the financial events of 1987, 2007, and 2008?

• Reducing interest rates

• Pouring liquidity into the system

• Cutting government spending

• Increasing taxes

What was considered problematic before the global financial crisis?

• Low inflation rates

• High unemployment rates

• Overconfidence in financial institutions

• Lack of technological advancement

What happens if the Federal Reserve loses its independence?

• Inflation control falls to fiscal authorities

• Interest rates become fixed

• The economy becomes more stable

• The stock market crashes