(Editor’s note: The views expressed here are those of Standard & Poor’s chief global economist. While these views can help to inform the ratings process, sovereign and other ratings are based on the decisions of ratings committees, exercising their analytical judgment in accordance with publicly available ratings criteria.)
The Federal Reserve released on Feb. 21 transcripts of the 2008 meetings and conference calls of the Federal Open Market Committee (FOMC), along with supporting material such as staff presentations and draft monetary policy statements. Those interested can now read virtually word for word the discussions and deliberations of the FOMC as it reacted to the financial crisis that erupted in September 2008. Initially, the Fed put the full force of its lender-of-last-resort capacities on display, and then, as it rapidly depleted its remaining 2% of policy interest rate ammunition, it launched into a new regime of operating monetary policy at the zero bound, using the two tools of “quantitative easing” (QE) and “forward guidance.” For Fed watchers, there is a treasure trove of material, made all the more interesting and valuable because many of the protagonists in the 2008 meetings, most notably Fed Chair Janet Yellen, are still very much front and center of monetary policymaking, and because, five years on, the Fed is still in the easing stage it ratcheted up in that period.