They knew it was too hot, but the market failure in the bond rating market hadn't been identified so they were operating off of flawed information.
The real failure of the Fed was being way too tight monetarily after the crisis started though.
The real failure of the Fed was being way too tight monetarily after the crisis started though.
https://fred.stlouisfed.org/series/BOGMBASE
I’m not an economist but that graph looks unhealthy.
The Fed has been much more on point this time around than it was in 2008.