Fed officials initially thought the credit crunch was a good thing.

FT: Embarrassing minutes show top officials at the US Federal Reserve took months to realise the 2007 financial crisis would have such a dire impact. “The transcripts reveal that some Fed policy makers even viewed the crisis, which erupted in August 2007 on the back of problems in the market for subprime mortgage loans, as good news because markets were pricing in more risk. ….Ben Bernanke, chair of the Federal Reserve, said ….. “It’s a question of market functioning, not a question of bailing anyone out”.”