Deduce Several Situations of the Fed's Handling of the Crisis

The Federal Reserve usually lowers interest rates in financial crises to stimulate economic growth and increase credit liquidity.

For example, in the 2008 global financial crisis, the Federal Reserve lowered the federal funds rate to minus 0.25% to stimulate borrowing and investment;

after 2008, In response to possible future financial crises, the Federal Reserve has adopted a more flexible monetary policy framework, which includes setting interest rates at appropriate levels rather than being fixed at a certain level to reflect changes in economic conditions.

Funding is provided to banks by issuing loans, providing liquidity support and directly purchasing commercial paper.

In order to prevent systemic risks similar to the 2008 financial crisis, the Federal Reserve has taken a series of measures to supervise systemically important financial institutions, such as implementing macro-prudential policies and requiring large banks to conduct stress tests.

In order to increase market expectation management and transparency, the Federal Reserve has changed the way it communicates monetary policy, and more frequently disclosed market expectations and decision-making processes.

Using history as a mirror to deduce the future, the world in the 21st century is already very different from the 20th century.

In the past, central bankers were most afraid of inflation, but now they have entered another "new normal", that is, too low inflation rate is also worrying. The low neutral interest rate also limits the space for lowering short-term interest rates, seriously weakening the effectiveness of traditional monetary policy.