The Great Recession and beyond
In 2007, the housing market collapsed. Two years later, the Dow Jones industrial average plummeted to its lowest level in a dozen years, and unemployment peaked at 10 percent.
To help the hemorrhaging economy, the government bailed out or took over some of the nation's largest financial firms, and presidents George W. Bush and Barack Obama signed stimulus bills to introduce tax cuts, consumer-protection measures and spending programs. The Fed lowered its benchmark interest rate to near zero percent and embarked on an economic stimulus program, buying as much as $85 billion in Treasuries and mortgage-backed securities per month.
Experts differ on whether the Fed's magic worked.
While Carnegie Mellon professor Meltzer says the effectiveness of the Fed's policies currently is "very low," Husson professor Wellington says the policies have been "generally helpful" and Babson professor Edmunds says the Fed made the Great Recession "considerably less severe than it would have been."
Janet Yellen is now at the helm as Fed chair, and our three experts have forecast that she'll maintain the status quo for the next few years. But no one knows what's in store for the next century of the Fed's reign.