The year 2008 marked the peak of a financial panic—incubated in the financial sector, unleashed by volatility in financial markets, compounded by weaknesses in financial institutions, and carried to the real economy through  7 See Board of Governors of the Federal Reserve System, “Federal Reserve Actions to Support the Flow of Credit to Households  and Businesses,” news release, March 15, 2020, https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315b.htm.
-5-  financial channels. The uncertainty that fueled that panic was born in the financial system, and policies aimed at the financial system could address it directly. Today’s uncertainty is different. The financial sector has felt its effects, and financial policy has helped limit the damage. However, its roots lie elsewhere and have burrowed deep into the marrow of the real economy.