Zaid

Now, these press conferences are now followed very closely.

The markets are following every word the Fed chair says.

Now, this transparency from the Fed was actually strategic because the more clearly the Fed communicates, the more affected their policy becomes.

If businesses and investors understand where rates are headed, they can plan accordingly.

And that stability actually helps the economy.

So by the 2000s, the Fed had evolved into a much more professional, transparent and accountable institution than it was in the 1970s.

The next big test for the Fed came in 2008 during the great financial crisis.

That financial crisis is still fresh in my mind.

The housing market had collapsed.

Major financial institutions were on the verge of failure and the entire global financial system was teetering on the edge.

And the Fed responded aggressively.

They slashed interest rates to basically zero.

They launched massive bond buying programs known as qualitative easing or QE to inject liquidity into the system.

And they created emergency lending programs to prevent a total collapse.

And I remember seeing then Fed Chair Ben Bernanke on TV all the time.

Now today, most people agree that those aggressive measures by the Fed prevented an even worse outcome in 08.

And the most recent test the Fed faced was during COVID-19.

The Fed actually acted even faster than they did in 08.

They bought massive amounts of bonds and they set up emergency lending facilities almost overnight.

These aggressive moves by the Fed likely prevented a global economic collapse, but