Newly released transcripts show Fed in 2008 grappling with widening financial crisis

WASHINGTON – Newly released transcripts of the Federal Reserve’s meetings during 2008 show the Fed grappling with a widening financial catastrophe and struggling to keep the crisis from tipping the economy into a deep recession.

During an emergency conference call Jan. 21, Chairman Ben Bernanke rallied support for a deep cut in interest rates by saying that market turmoil pointed to investors’ growing concerns that “the United States is in for a deep and protracted recession.”

Bernanke apologized to his colleagues for convening the call on the Martin Luther King holiday. But he said he felt that the urgency of the crisis required the Fed to act before its regularly scheduled meeting the next week. The Fed approved a cut of three-fourths of a percentage point in its benchmark for short-term rates.