The increase in risk led to a major financial crisis, which the Federal Reserve addressed through a large amount of broad-based lending. The decrease in net worth led to a major recession and ongoing slow recovery. The Federal Reserve’s reduction in interest rates has lessened the impact of this change in net worth.
3  4  See Kocherlakota (2010) for a more extensive discussion of the relevant transmission mechanisms. BIS central bankers’ speeches  Looking back over the past four years: outcomes How has the Federal Reserve performed relative to its dual mandate over the past four years, since the onset of the Great Recession at the end of 2007?