Transcripts Show Fed Underestimated Crisis in 2007
WASHINGTON (AP) – Federal Reserve officials in 2007 badly underestimated the scope of the approaching financial crisis and how it would tip the U.S. economy into the deepest economic downturn since the Great Depression, transcripts of the Fed’s policy meetings show.
The meetings occurred as the country was on the brink of its worst financial crisis since the 1930s. As the year went on, Fed officials shifted their focus away from the risk of inflation as they slowly began to recognize the severity of the problem.
Beginning in September 2007, the Fed cut interest rates and took extraordinary steps to try to ease credit and shore up confidence in the banking system. Throughout the year, the housing crisis deepened, home prices weakened and subprime mortgages soured.
China’s Growth Rebounds But Still Vulnerable
BEIJING (AP) – China’s economy is finally rebounding from its deepest slump since the 2008 global crisis but the shaky recovery could be vulnerable to a new downturn in global trade.
Growth rose to 7.9 percent in the three months ending in December, up from the previous quarter’s 7.4 percent, data showed Friday. For the year, the economy grew by 7.8 percent, which was China’s weakest annual performance since the 1990s.
Retail spending and factory output rose, but analysts say China could suffer a setback if exports weaken or the government fails to maintain investment spending that is propping up the recovery.
Government: Food Allergies May Be Disability Under Law
WASHINGTON (AP) – Allergic to gluten? What about peanuts? Federal disabilities law may be able to help.
The Justice Department said in a recent settlement with a Massachusetts college that severe food allergies can be considered a disability under the law. That gives those who suffer from such allergies a new avenue in seeking menus that fit their diet. But some say it goes too far.
The decision leaves schools, restaurants and other places that serve food more exposed to legal challenges, if they fail to honor requests by people with food allergies.