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In December 2007, Yellen had also expressed concerns about growing dangers and failed to persuade her Fed colleagues to back a half-point cut in interest rates. The Fed's policy committee instead approved a smaller quarter-point reduction in interest rates.
The December 2007 transcripts show Yellen saying, "Any more bad news could put us over the edge, and the possibility of getting bad news — in particular, a significant credit crunch — seems far from remote."
As 2008 unfolded, Yellen's concerns about a credit crunch proved correct.
— USING DIFFERENT LANGUAGE IN PUBLIC
At the March 18 meeting, Mishkin, who resigned later that year to return to teaching at Columbia University, said he felt the country was in a serious financial crisis, though he said he didn't use the word "crisis" in public:
"We are in a financial crisis, and it is worse than we have experienced in any other episode of financial "disruption," which is the word I use. I will not use 'financial crisis' in public. 'Financial disruption' is still a good phrase to use in public, but I really do think that this is a financial crisis. It is surely going to be called that in the next edition of my textbook."
Earlier, Mishkin had missed a January emergency call because he was "on the slopes."
"I think in Idaho somewhere," Bernanke said.